LEADERSHIP DEVELOPMENT CENTRE
ANNUAL REPORT 2012/2013
G59
Hon Dr Jonathan Coleman Minister of State ServicesIn accordance with section 44(1) of the Public Finance Act 1989, I present, on behalf of the Leadership Development Centre
Board of Trustees, the annual report on the operations of the Leadership Development Centre for the year ended 30 June 2013.
Dr PAuL reynoLDs
Chair, Leadership Development Centre Board of Trustees
Presented to the House of representatives pursuant to section 44(1) of the Public Finance Act 1989
Published by the Leadership Development Centre, november 2013
G59
Contentsreport from the Chair .................................................................................................3
report from the Chief executive ................................................................................5
section one: Achievements and impact ....................................................................8
Highlights ..............................................................................................................8
About us ..............................................................................................................11
our performance ................................................................................................13
Impacts ................................................................................................................14
section Two: Performance and delivery ...................................................................15
statement of service performance ....................................................................15
organisational capability and performance ......................................................22
Independent auditor’s report .............................................................................23
section Three: Financial statements 2012/13 ..........................................................25
statement of responsibility ................................................................................26
statement of comprehensive income ...............................................................27
statement of financial position ..........................................................................28
statement of changes in equity .........................................................................29
statement of changes in fellowship funds ........................................................29
statement of cashflows ......................................................................................30
notes to and forming part of the Financial statements ...................................31
section Four: Appendicies .........................................................................................50
Appendix A: Directory.........................................................................................50
Appendix B: LDC member agencies 2012/13 ....................................................51
Contents
annual report 2012/2013
2
3
leadershipdevelopmentcentre
Strong leadership is vital
over the last year, the need for strong leadership has never
been more vital. There is no doubt, today’s working environment
presents us with more complexity and ambiguity, with pressures
and challenges coming from more directions than ever before.
The expectation on leaders is great. We need leaders who can go
beyond their technical capabilities and who want to develop their
own leadership skills so that they can achieve better outcomes.
our leaders need to be able to develop strong teams and
encourage those people to work collaboratively for joint
outcomes. All of our leaders need to be prepared and willing to
use their leadership talents across the public sector.
Collective impact
With the Government’s focus on creating a public sector that is
more innovative, efficient and focused on delivering better
public services to new Zealanders, working collaboratively is
imperative.
In his February 2013 address to the Institute of Public
Administration new Zealand (IPAnZ), Hon Bill english, Deputy
Prime Minister, stressed the importance of ‘collective impact’.
He explained that our public sector needs to have porous,
outward-looking agencies that work collaboratively and value
the skills that others can contribute to the overall work efforts.
By understanding the ‘whole’ and providing a collective
impact, we will be able to drill down to help individuals more
comprehensively and efficiently.
The advice offered in the Better Public Services Advisory Group
Report of november 2011 took on a greater imperative when
the Government set the 10 key results in 2012. none of these
10 challenging result areas can be achieved by a single agency.
Developing high-quality influencing skills and being able to work
collectively needs to be a priority for leaders.
Report from
the Chair
Greater expectations on chief executives to raise leadership levels
Proposed changes to the state sector Act 1988 this year outlined
new expectations for chief executives in building capability
in their own agencies and across the Public service. Chief
executives will enact a clarified and extended mandate from the
state services Commissioner as they participate in and drive
leadership across traditional boundaries. The legislation changes
sharply focus chief executives on building a strong leadership
pipeline to enable us to deliver effectively on the Government’s
priorities.
The Leadership Development Centre’s (LDC’s) role as a shared
service, available to help all chief executives meet their new
responsibilities, has never been more important. Chief executives
require high-quality leadership development information in order
to develop their most talented people well. They need to be able
to clearly identify their own agencies’ leadership strengths and
challenges and make decisions that will benefit their agencies
and the whole public sector.
Innovative leadership development
our data and the research show that senior leaders need a
breadth of experience to take on more senior roles. so, there
is a greater emphasis on making experiential development an
important part of a leader’s development.
In April 2013, the LDC Board signed off a new leadership
development initiative, Leadership Link, an experiential learning
programme to be developed by LDC. Leadership Link will take
high-potential leaders and place them into other organisations
to enable the individuals to experience different leadership roles
and develop their skills. This initiative will help chief executives
and other senior leaders formulate a more targeted and planned
approach to developing successors.
annual report 2012/2013
4
Career board changes
LDC continues to play an important part in the decisions made
at career boards. Career boards have continued to grow in
their system role, and they are now responsible for identifying
successors for system critical positions. LDC provides real
value to career boards in its role as a centre of excellence
in leadership development, assisting chief executives with
their agency and system responsibilities and providing
expert knowledge of senior leader and system leadership
requirements.
Board changes
We were pleased to welcome David Carter to the LDC Board
in september 2012, following a decision in 2011/12 to invite a
private-sector individual to join the Board. We also farewelled
Geoff Bascand, who was appointed as Deputy Governor and
Head of operations at the reserve Bank of new Zealand in
February 2013. He resigned from his role as Chief executive,
statistics new Zealand, and stepped down from the LDC Board.
We highly valued Geoff’s guidance and wisdom over the three
and half years he was a Board member and wish him well in his
new position.
Dr Paul reynolds
Chair, Leadership Development Centre
5
leadershipdevelopmentcentre
Report from the
Chief Executive
Strengthening and supporting the system of public sector leadership in New Zealand
The 2012/13 year has been highly productive for LDC as we
implemented the 2012–14 business strategy and directed our
efforts towards strengthening and supporting the new Zealand
public sector leadership system. This focus acknowledges
the unique view LDC has of the public sector through our
assessments and our work with public sector chief executives
and senior leaders.
The importance of strong leadership development is core to
a high-performing 21st century public sector. The research is
compelling – there is a clear link between developing people and
improving business performance.
Assessment for Development
A growing focus for LDC relates to working with high-potential
leaders, primarily through Assessment for Development (AfD).
The AfD data, that LDC gathers and analyses, directly assists the
individuals, chief executives, the state services Commissioner
and the career boards by building a single across-the-board
measure of system capability and development needs. It provides
chief executives and the career boards with a single consistent
comparison of senior leader capability and allows for a collective
approach, led by the state services Commissioner, to identifying
and developing talent.
over the last year, AfD has being increasingly recognised by chief
executives and the state services Commission as a key input to
the whole-of-system identification and development of talent.
Research
our revised business strategy includes a greater focus on
research. During the 2012/13 year, we set up a research agenda to
ensure that LDC provides public sector leaders with relevant and
accessible leadership research. The research agenda also informs
LDC’s and other agency’s activities and encourages the growth of
leadership research in new Zealand.
We established the scholars Panel, comprising academic
leadership experts from new Zealand and overseas. The Panel will
help set the direction for leadership development both for LDC
and the wider new Zealand public sector.
We also renewed our agreement with the united states-based
Corporate Leadership Council to continue to provide up-to-date
leadership research, including a quarterly, tailored research report
relevant to new Zealand public sector chief executives.
The research, Performance Improvement Framework (PIF)
analysis and our other data, such as AfD, enable us to provide
the public sector with robust data and the information it needs to
inform the delivery of quality leadership development.
New leadership resources
From a combination of quantitative and qualitative data, such as
the PIF, AfD and chief executives’ and senior leaders’ feedback,
we identified a demand for practical resources on leadership
development and developed a range of toolkits. These toolkits
cover a range of topics, including: ‘experiential learning’ and
‘Transitioning to a new role’. The toolkits will give easy access to
leadership development topics to help leaders deliver on their
role of leading and managing others. They will be highly valuable
to individual developing leaders as well as human resource (Hr)
and organisational development (oD) teams in their leadership
development programmes. The toolkits are a clear demonstration
of LDC’s shared service and centre of excellence roles.
annual report 2012/2013
6
Facilitating Maori public sector leadership
Following the review of the Maranga Tira programme in 2011,
LDC facilitated a hui in partnership with chief executives from
the natural resources sector (nrs) in november 2012 to
consider future options for stewarding Maori leadership within
and across the public sector. The hui recommended working
towards a networked and distributed leadership to develop
Maori talent and foster collaboration between agencies.
The hui also requested that chief executives present their
high-potential Maori leaders at sector career boards in order to
better identify and steward those individuals’ development.
Working closely with agencies on their leadership programmes
As part of our advisory and centre of excellence role, LDC has
been working closely with agencies to help them develop their
leadership programmes and ensure their access to relevant LDC
topics and providers. We had an increased number of requests
from individual agencies for specifically tailored options from
our leadership programmes. As a result, over the last year, we
have been developing a more customised approach to our
programme delivery, offering a range of modularised, bespoke
options that are informed by a combination of feedback and
data, such as PIF and employee engagement.
Partnerships
We have continued our relationships with The Australia and
new Zealand school of Government (AnZsoG), Victorian
Leadership Development Centre (VLDC) of the Victoria state
Government and the Australian Public service Commission’s
(APsC’s) strategic Centre for Leadership, Learning and
Development and regularly share information on leading
practice and new developments in senior leader development
with these organisations.
our new Zealand Defence Force (nZDF) partnership is
ongoing, with the narrative research project outcomes being
incorporated into our development work and being made
more widely available. Many of these will feature in our
leadership development toolkits.
Leadership programmes
our portfolio of structured leadership programmes has been
designed to strengthen the leadership capabilities across the
board, from early leadership roles through to chief executive
level. our core programmes included:
• Chief Executive Development
• Executive Leadership Learning Network – informed
by Public service career boards for those close to moving
into large complex roles, including chief executive
• Leadership Development Programme – for senior
public sector leaders with a track record of high
performance who are looking to progress to the next
stage in their careers
• Leadership in Practice – for leaders moving from
functional to organisation leadership roles
• Action Learning Groups – aimed at managers who
manage other managers, these workshops explore
specific themes, such as ‘What great managers do’.
LDC designs and facilitates these programmes, along with
tailored interventions that draw on lessons from ‘real world’
experiences.
our programmes are complemented by member events that
focus on areas of particular relevance and interest to the
public sector. Both local and international speakers present
on up-to-date leadership concepts and thinking.
Through these events and our programmes, members can
build the networks that are critical to the success of the
Better Public services approach and make connections
that will endure well beyond the leadership development
programme.
7
leadershipdevelopmentcentre
Senior leaders’ programmes
The biggest changes to our senior leaders’ programmes
involved replacing the Public sector Advanced Leadership
Programme (PsALP) with the new executive Leadership
Learning network (eLLn) in May 2012 and the Leadership
Development Programme (LDP) in november 2012.
These two new programmes enable us to better target
our approach to individual learning. They aim to match the
programme content with the needs of the cohort and the
system. They reflect contemporary leadership development
practices in their structure and delivery, for example, Action
Learning Groups (ALGs) and coaching.
These programmes are becoming increasingly important due
to the whole-of-system leadership development focus arising
from the chief executives’ and state services Commission’s
senior leader work, including a stronger focus on succession
and the career boards. The two new LDC programmes aim
to support chief executives as they seek to drive leadership
development for their own agencies and across the public
sector.
In appreciation
Thank you to the Board for its highly valuable guidance during
the past year. With greater expectations on chief executives
to deliver leadership development, the Board’s input, advice
and support of LDC’s activities and approaches is essential in
helping shape our direction and priorities.
Thank you also to the LDC staff and development partners for
their ideas and enthusiasm in what has been an incredibly
productive year, as we have strengthened and enhanced LDC’s
role in delivering quality leadership development.
our providers, consultants and speakers have made valuable
contributions, and I have greatly valued their work and the
insights and reflections they have shared with us and senior
leaders across the public sector.
Through our work providing leading practice advice and
resources and drawing from high-quality data, we facilitate
common and consistent approaches across agencies. This helps
chief executives and the career boards to assess leadership and
talent fairly and accurately across the public sector and is vital
in enabling chief executives to work collectively.
This leads me to a final thank you to our member agencies.
Their continuing contribution to developing public sector
leadership sees them positively engaged in working towards a
successful system-wide approach to leadership.
rosemary Hannah-Parr
Chief Executive, Leadership Development Centre
annual report 2012/2013
8
Highlights
49 chief executives engaged in their
own development
53 people began senior leader programmes
− Leadership Development
Programme (LDP) and Leadership in Practice
(LiP)
49
215 engagement opportunities brokered and partnerships
enhanced
45 people completed an Assessment for Development (AfD)
and a further 43 people started the
assessment process
11 senior leaders
began the Executive Leadership Learning
Network (ELLN) programme, with two now in chief executive roles
over 600 members accessed
Corporate Leadership Council (CLC)
research articles
179 agency advice
sessions, briefings and
input into system development
over 460 senior leaders attended LDC
member events
11 53 600215 179 460
AfD and PIF data analysed
to inform leadership development
priorities.
45
9
SECTION ONE ACHIEVEMENTS AND IMPACT
Systems information—better data informing priorities
In the 2012/13 year, LDC focused on mining the data it holds
and collects from Assessment for Development (AfD) and
leadership development programmes and overlaying it with
the Performance Improvement Framework (PIF) and individual
agency employee engagement results to determine areas in
leadership development that are particularly strong or that
need more attention. This information provides chief executives,
agencies and the state services Commission with valuable
insights into the state of and requirements for system leadership
development.
The AfD is a critical first step and has multiple benefits:
individuals and their managers are able to identify the right
development interventions for their needs; and agencies and the
leadership development system can easily identify the overall
themes that guide leadership development in our public sector.
LDC has improved the way it collects, analyses and reports its
information, including revising the suite of tools used in the
AfD. A leadership development analyst was employed in March
2013 to design new evaluation and reporting tools and provide
expertise in how to integrate and use the data gathered.
over the last year, chief executives and the state services
Commission have developed a greater appreciation for the AfD
as a key input to the career board process. The assessment
provides a consistent and common framework and set of
leadership development data that allows comparison across
multiple agencies and tiers. It enables chief executives and the
career boards to accurately compare and contrast their senior
leaders’ development.
Continuous improvement
Continuous improvement reviews have been conducted on the:
• executive Leadership Learning network (eLLn)
• Leadership Development Programme (LDP)
• Assessment for Development (AfD)
• Leadership in Practice (LiP) programme.
LDC has implemented recommendations from the reviews, with
changes made to both content and design.
The review of our Leadership in Practice (LiP) programme
content resulted in material being added to the week-long
residential course that is more responsive to the current
environment. A session on ‘leading in complexity’ was
introduced to the programme.
LDC also responded to participants’ feedback by creating apps
for the LiP programme content. This recognises that the course
material has a wider audience than the immediate participants,
and the apps significantly improve the dissemination of the
programme material. iPads, containing the course modules,
reference material and related e-books, were issued to course
participants. The LiP resources have also been added to
LDC’s website and have been made available to previous LiP
graduates.
Career boards
The proposed changes to the state sector Act 1988 have
resulted in sector career boards taking on responsibility for
identifying and developing high-potential leaders for system
critical positions. The career boards will continue to focus
on enabling cross-sector movement of the high-potential
leadership cohort and fostering opportunities across agencies to
support the development of a wider group of leaders.
annual report 2012/2013
10
Looking at leadership needs
LDC has looked at the PIF results to date, including the Getting
to Great report, which summarises 21 individual PIF reviews.
Analysis of the results has provided LDC with an insight into
progress in public sector leadership development and has
enabled us to consider how we can best align our services
to benefit leaders in developing themselves and their teams,
agencies and the public sector.
The collated PIF results also demonstrated that the best
institutions enjoy strong internal leadership that can attract
talented people and inspire those people to dedicate
themselves to working with integrity in delivering the agency’s
outcomes. LDC’s purpose is to assist chief executives and their
agencies, the state services Commission and career boards in
attaining high-quality leadership and setting up clear succession
pipelines.
From the PIF analysis, in 2012/13, LDC identified three target
groups for leadership development: tier 2 leaders, heads of
corporate functions with a focus on organisational leadership
and management, and emerging leaders, as well as specific
areas for development. These include managing vision and
purpose, strategic agility and innovation management. Work is
underway on how best to incorporate these areas. one example
is the ‘What great managers do’ Action Learning Group.
our clinic topics reflect our response to current leadership
needs. They have included sessions presented by international
and national leadership experts on such topics as: complexity,
innovation, leadership for delivering better Public services and
leader-led development.
11
SECTION ONE ACHIEVEMENTS AND IMPACT
About usThe Leadership Development Centre (LDC) is the public sector’s centre of excellence in leadership
development.
LDC operates as a shared service for member public sector leaders and has an in-depth understanding of
the leadership challenges facing the new Zealand public sector. It exists to develop leaders who will lead
the public sector effectively and achieve the best results for new Zealanders by providing better public
services.
2012/13 Leadership Development Centre Board
• Dr Paul reynolds (Chair), Chief executive Ministry for the
environment
• David Carter, Group Director, Performance excellence and
Group Health and safety Manager, Beca
• Mike Hollings, Chief executive Te Aho o Te Kura Pounamu
− The Correspondence school
• Lieutenant General rhys Jones, Chief of the new Zealand
Defence Force
• Colin MacDonald, Chief executive and secretary for
Internal Affairs Department of Internal Affairs
• Martin Matthews, Chief executive Ministry of Transport
• Al Morrison, Director-General Department of Conservation
• Iain rennie, state services Commissioner (permanent
member)
• Carolyn Tremain, Chief executive and Comptroller of
Customs new Zealand Customs service
Departures during 2012/13• Geoff Bascand, Chief executive Department of statistics
(until May 2013)
The Board is supported by a core team led by the LDC
Chief executive and uses the services of a wide network of
leadership development consultants and providers, both
national and international, to deliver services and activities.
At 30 June 2013, LDC had 61 government department and
agency members.
LDC is led by some of the public sector’s most experienced and
knowledgeable leaders and is underpinned by the joint objectives
of the public sector chief executives and the state services
Commissioner.
one of LDC’s key areas of focus is to develop existing leaders and
identify the public sector’s next generation of leaders.
LDC services include:
• leading practice guidance
• access to tools for talent spotting
• leadership development planning and implementation
• individual assessment
• customised programmes for identified leaders
• information on experts in the field and accredited coaches
• access to facilitators and mentors
• information on the latest leadership development research.
Our organisation
Governance
LDC is governed by a Board of Trustees, comprising chief
executives from mostly public sector organisations elected by
their peers. The Board develops policies and defines the focus of
LDC’s work. It also acts as a bridge between LDC and the public
sector in new Zealand.
In February 2012, LDC Board members voted to change the
constitution to include provision for a private sector leader to
be co-opted to the board. David Carter, Beca Group Director,
Performance excellence and Group Health and safety Manager,
new Zealand, joined the LDC Board in september 2012.
annual report 2012/2013
12
Output 17%
Knowledge and information
Output 21%
Advisory services
Output 62%
Programmes and events
Impact: Agencies use LDC advice to inform their investment in leaders
LDC will use its evidence to provide leadership development advice to agencies
and individuals
Impact: Better connected system and people
LDC will connect people, agencies and institutions to leverage opportunities for
collective public sector learning
Intermediate outcomes
More evidence-informed investment in leadership system
Intermediate outcomes
Better leaders
LDC outcomes
Strengthen public sector More leaders to be highly leadership capability successful in their roles
State Services Commission objective to which we contribute:
Pillar 3: Building System Capability. Strengthening the leadership of the public service, which is especially necessary during times of transformation and fiscal constraint.
Impacts for 2012/14
LDC’s 2012–2014 Performance Framework
13
SECTION ONE ACHIEVEMENTS AND IMPACT
Our performance
First, we have practical experience working with potential
and well-established leaders in the new Zealand context. We
know what works in assisting these leaders to perform in their
current roles. We take an overview of a leader’s development,
checking in with them over time and following the results of their
development and leadership successes.
second, LDC’s ownership structure means it is a shared service
for chief executives. This system-wide perspective means that
LDC is agile and flexible and can quickly reshape its leadership
development system to respond to the changing needs of chief
executives and state services Commission in challenging times.
Furthermore, it can broker opportunities for collective benefit,
which may not otherwise be available to single entities.
As a result of this unique positioning, LDC has contributed to
building system capability through the following outcomes:
1. strengthening public sector leadership capability
2. encouraging more people to be highly successful in their
roles
3. encouraging more evidence-informed investment in the
public sector leadership system
4. supporting the emergence of better leaders.
A key focus of 2012/13 was for LDC to work with chief executives and the state services Commission on
initiatives to deliver a whole-of-system approach to senior leadership development and succession planning
across the new Zealand public sector, including career boards. During the year, we collected and synthesised
system insights and see this as having increasing relevance and impact on our overall performance and our
delivery towards the Better Public service results. one of our great values is the strong ancillary networks we
have helped establish across the public sector through membership with our organisation.
LDC is uniquely placed to deliver both for individuals and the system.
We put in place new measures that we will start to assess for
trend data and report on over time. Information will be used in
developing our strategic direction, advice and programmes. over
the next few years, we expect to be able to identify more clearly
the value that our brokering role contributes to the high-level
outcomes. We also expect our impact measurements around
connectedness and evidence-informed decisions will allow us to
monitor the progress of public sector leadership development in
supporting good service delivery to the new Zealand public.
Based on PIF results for 2012/13, we know that there are
significant opportunities for improvement. We will be using the
PIF data to monitor how people are adapting to changes in role
scope, complexity and level of expectation. our future aim is
to use Assessment for Development data and other individual
evaluations to assess the collective strengths and areas for
improvement.
over time, we expect to produce trend information on the
number of credible candidates available for non-specialised
senior positions who have been involved in LDC advice or
programmes. What we do know is that out of the current 29
Public service chief executives, eight are LDC alumni.
annual report 2012/2013
14
ImpactsLDC set a system-wide focus to ensure that we are delivering appropriate services to both individuals and
agencies across the system. We want to know that not only are our programmes improving leadership for
individuals, but also that LDC opportunities are resulting in better connected systems and people to manage
challenges together.
developing their leadership capability. one of the resounding
benefits participants refer to is the on-going support from peers
both during and well after completion of the ALG course.
LDC’s other programmes, such as its executive Leadership
Learning network also offer excellent networking opportunities
They allow participants to work as small cohorts of peers in a
bespoke programme based on individual system development
needs.
During the year, agencies increasingly used LDC advice to
inform leadership investment. The Assessment for Development
has taken on a more fundamental role in highlighting
development priorities for people who have been identified as
possible successors to critical roles and other senior leaders.
During the year, we worked with 88 senior leaders through this
process, and we know that this number will increase in the
following year.
These two areas rely not only on effective programmes that
encourage individuals and agencies to work together but also on
our new initiative of providing advisory services. Advisory services
are based on the knowledge (research and experience) that we
develop and share. We make this knowledge and information
available directly to organisations and also distil targeted advice
from it to provide to chief executives and agencies seeking to
enhance their development spend.
This year we have actively worked to connect public sector
leaders. research tells us that networking improves collaboration
but that it has been undervalued as a core leadership
competency. LDC strongly focuses on developing leaders’
networking abilities and is fully aware of the value in the long-
term relationships that it facilitates amongst its members.
LDC’s Action Learning Groups (ALGs) provide an excellent way for
leaders to broaden their networks and work collaboratively while
15
SECTION TWO PERFORMANCE AND DELIVERY
Statement ofservice performanceour programmes and events expose public sector managers to new ideas and skills. Participants then have
the opportunity to apply these ideas and skills on the job, with the intensive LDC programmes supporting them
through that process.
Measurement at the output level focuses on the quality of the knowledge, information, advice and programmes.
LDC assumes that if our programmes are of a high quality, then leaders will, through better connection with
others, solve more public sector challenges, lead better and thereby improve the performance of the public
sector. LDC also intends to develop advice, based on a system perspective that will assist chief executives to
make well-informed investments in leadership to the benefit of the leadership development system as well as
the individuals concerned.
2013 ACTUAL 2013 BUDGET OUTPUT CLASS INCOmE EXPENDITURE INCOmE EXPENDITURE
INfORmATION AND kNOwLEDGE
system knowledge 86,245 112,068 89,574 95,265
resources and products 276,591 261,273 291,978 283,095
Development projects 240,481 196,751 255,254 281,431
Total information and knowledge 603,317 18% 570,092 17% 636,806 18% 659,791 17%
ADvISORy SERvICES
system stakeholder engagement 231,121 438,453 231,112 254,901
system advisory services 480,200 492,779 398,797 398,181
Products 85,003 66,828 76,000 76,671
Development projects 113,122 156,194 113,091 101,186
Total advisory services 909,446 28% 1,154,254 34% 819,000 24% 830,939 21%
PROGRAmmES AND EvENTS
Chief executive development 219,472 134,352 229,809 267,429
executive leadership programme 265,148 172,863 307,942 315,851
Leadership development programme 248,559 237,280 333,404 286,461
Public sector advanced leadership programme 117,785 104,054 121,284 151,928
Leadership in practice 491,870 493,308 547,608 573,633
White water learning 43,217 24,170 64,753 68,543
Fellowships 127,903 142,878 126,453 212,643
events 254,770 359,284 273,468 497,941
Total programmes and events 1,768,724 54% 1,668,189 49% 2,004,721 58% 2,374,429 61%
Total 3,281,487 100% 3,392,535 100% 3,460,527 100% 3,865,159 100%
All figures presented Are stAted in new ZeAlAnd dollArs
System stakeholder engagement expenses were higher than budgeted by $183,000, mainly due to actual allocation of staff time in this area being 19% instead of 7% as budgeted. This is consistent with the number of engagment opportunities brokered and agency advice sessions held during the year due to demand for LDC services in line with the revised business strategy.
Cost of Service Statement for the year ended 30 June 2013
annual report 2012/2013
16
Achievement of our work programme
our work programme for the year was set out in three output classes. Achievements against these are described below.
Output 1: Knowledge and information
PERfORmANCE mEASURE TARGET 2012/13 ACTUAL 2012/13 ACTUAL 2011/12
Number of research products(Corporate Leadership Council, CLC)
LDC website to be updated 6 times with new CLC articles
Partially achieved: CLC articles were updated 5 times with 57 different articles.
New measure in 2012/13
Number of logins to the CLC section of the website
60 per month Achieved: 60 per month
New measure in 2012/13
Use of LDC research products; web downloads
3% growth monthly Not achieved: 9.8% growth overall
New measure in 2012/13
During the year, LDC members had access to the exclusive
member resources, tools and research, including:
• research: access to research on leadership development
from new Zealand and around the world, including from the
united states-based Corporate Leadership Council (CLC).
We provided a selection of articles and research on topics
relevant to individuals, teams and agencies.
• Toolkits: designed to provide practical support for senior
leaders’ own development and to support them as they
develop others.
• self-assessment tool: as well as our formal assessment
offerings, we provided access to a self-assessment tool based
on the state services Commission’s and chief executives’
Leadership success Profile. The assessment is designed
specifically for public sector, with a focus on the skills and
capabilities required of public sector leaders.
• recordings from our various leadership clinics, and of high
profile and international speakers.
• strategies, frameworks and evaluation tools: a place for
member agency Hr and organisational development leaders
to share best practice research and their own leadership
development strategies, competency frameworks and
evaluation tools.
• Book rappers: a catalogue of the leadership books available
to read, watch or listen to, providing insight into some of the
latest and best leadership thinking from around the globe.
Focus on research
In April 2013, LDC established a scholars Panel, comprising a
small group of academic leadership experts from new Zealand
and overseas. The Panel discusses current and future leadership
challenges, assists in providing up-to-date and practical advice
around emerging leadership development themes, and helps
direct LDC in relation to commissioning leadership research.
In this way, the scholars Panel will help set the direction for
leadership development both for LDC and the wider public sector.
17
SECTION TWO PERFORMANCE AND DELIVERY
Output 2: Advisory services
PERfORmANCE mEASURE TARGET 2012/13 ACTUAL 2012/13 ACTUAL 2011/12
Number of engagement opportunities brokered and partnerships enhanced
100 Achieved: 215The higher than expected actual number was due to demand for LDC services due to the revised business strategy providing a broader mandate.
98
Number of agency advice sessions, briefings and input into system development
50 Achieved: 179The implementation of the business strategy from a predominately individual focus to an agency and public sector system focus resulted in increased activity.
66
Number of individuals assessed through Assessment for Development (AfD)
50 commenced
Achieved: 45 completed an AfD during 2012/13 and a further 43 commenced during the year but as at 30 June 2013 had not completed the assessment.
81
Advice is delivered in accordance with agreed quality
100% Achieved: Advice has been provided using appropriate and/or relevant frameworks and has been informed by data and leading practice research
New measure
Informed by our assessments, observations across the sector and
the latest research on leadership development, in 2012/13, we
provided advice to member chief executives, their agencies and
Public service career boards. our advisory services for members
included:
• Assessment for Development: a rigorous process for
identifying and evaluating the strengths and development
needs of individuals against the needs of agencies and the
sector
• 360-degree assessments
• brokering and delivering development opportunities
• interventions based on leading practices and tailored to
meet the needs of the new Zealand public sector
• opportunities to connect with agencies’ activities
through our whole-of-system knowledge of our member
organisations’ leadership development programmes and
interventions.
annual report 2012/2013
18
Individual development plans
From our reviews of new programmes for the 2012/13 year, we
found that few participants had individual development plans
(IDPs) in place before commencing on one of our programmes.
As a result, we have been emphasising the importance of setting
up well-informed IDPs. IDPs give our members access to the
right career development tailored to their specific needs, their
agency’s needs and the needs of the public sector. They are
also valuable in defining what would be the most meaningful
experiential developments and subsequently value-for-money
development interventions.
Management skills programme
responding to data from the PIF and the AfD, and members’
demands for management training for leaders, LDC has been
working with the natural resource sector (nrs) and other
agencies to offer a new LDC core management development
programme for tier 3–5 leaders based on the well-regarded
programme Building Capable Managers. Due to the demand from
agencies and PIF feedback, this programme will now form a key
part of LDC’s delivery and brokering services.
HR/OD professional development sessions
LDC has continued to work closely with the state services
Commission to coordinate the Human resources (Hr)/
organisation Development (oD) community. early in 2013,
we agreed with the state services Commission to alternate
professional development sessions with ssC’s central agency
briefings. In March 2013, Professor David Albury, Visiting
Professor in Innovation studies at King’s College, London,
Development Director of the Global education Leaders’ Program
(GeLP) and Director of Innovation unit, London, facilitated the first
session with heads of the new Zealand public sector Hr/oD and
their senior staff.
19
SECTION TWO PERFORMANCE AND DELIVERY
Output 3: Programmes and events
PERfORmANCE mEASURE TARGET 2012/13 ACTUAL 2012/13 ACTUAL 2011/12
Chief Executive Development (Group events)
4 held Achieved 11 held 6 held
Executive Leadership Learning Network (ELLN)
1 commenced Achieved: With ELLN commencing in August 2012.
New measure in 2012/13
Leadership Development Programme (LDP)
1 commenced Achieved: With 1 programme commencing in November 2012.
1 commenced
Public Sector Advanced Leadership Programme (PSALP)
Cohort 5 graduates (last cohort)
Achieved: Cohort 5 completed their programme, however the actual graduation was held in July 2013 to coincide with Sir Peter Blake Trust week.
Cohort 4 completed June 2012
Cohort 3 completed December 2011
Leadership in Practice programme (LIP)
3 commenced Achieved: 3 programmes commenced in November, March and June.
4 commenced
Themed Action Learning Groups (ALGs)
2 commenced Achieved: 3 commenced in March, September and May.
New measure in 2012/13
Fellowships awarded 3 awarded Partially achieved: 2 awarded.
3 awarded
Events held 11 held 27 held due to demand and availability of expert presenters and speakers, both national and international.
25 held
Learner satisfaction with quality of programmes
On a scale of 1-5: average result 3 or better indicated expectations met
Achieved: 3.4 (Measure changed during the year to a scale of 1-4).
New measure in 2012/13
Willingness of participants to recommend the course to others
On a scale of 1-10: average result 6
Achieved: 8.9 New measure in 2012/13
Skill changes of participants in intensive programmes
Assessment to be conducted at beginning and end of programmes
This measure will be assessed from the 13/14 year.
New measure in 2012/13
annual report 2012/2013
20
our portfolio of structured leadership programmes is designed to
strengthen the leadership capability of people in early leadership
roles through to those at the chief executive level.
LDC designs and facilitates these leadership programmes along
with tailored interventions, which draw on lessons from ‘real
world’ experiences.
our programmes are complemented by member events that
are highly relevant and focus on areas of special interest to the
public sector. Both local and international speakers present on
current leadership concepts and thinking.
Through these events and our programmes, members can build
the networks that are critical to the success of the Better Public
service (BPs) and make connections that endure well beyond the
development activity.
Chief executive development
Chief executive development has continued to be a focus
for LDC, with a wide range of highly relevant chief executive
masterclasses, discussions and round-table sessions attended
during the year. of the 11 events held, 9 were specific to chief
executives, and 49 different chief executives attended. Two
events were opened up to senior leaders and a further 32 senior
leaders attended these. A total of 25 chief executives attended
more than one event.
A highlight was a masterclass facilitated by David Albury, Visiting
Professor on Innovation at King’s College, London, Development
Director of the Global education Leaders’ Program (GeLP) and
Director of Innovation unit, London. David was in new Zealand
for the Delivering Better outcomes for Lower Costs: Leading
Public sector Innovation executive workshop organized by the
Australia and new Zealand school of Government in association
with LDC.
other chief executive sessions involved speakers Professor Jon
Pierre, from the Department of Political science at the university
of Gothenberg, sweden; David Butler; former Commissioner
and Chief executive of Inland revenue and Fran Wilde Chair of
Greater Wellington regional Council.
The round-table sessions continue to provide a space for open
discussion on a range of leadership issues and challenges.
Executive Leadership Learning Network
The first executive Leadership Learning network (eLLn)
programme was based on the principles of self-directed
development needs, with subsequent programme content flowing
from this. As a result of the continuous improvement review in
early 2013, LDC has implemented a new curriculum based on
a combination of system and individual development priorities,
taking into account the increased focus on the critical roles and
succession needs.
Leadership Development Programme
The second and third cohorts of the Leadership Development
Programme (LDP) began in november 2012. As a result of the
continuous improvement review, the programme structure
and content has been modified to include a larger component
of pre-identified content up front. This differs from the original
format, where the programme was built once the needs of the
participants had been identified. This prescribed content includes
topics that address the leadership gaps identified by PIF work,
themes emerging from the AfD, and leading practices. Where
strong and common needs are identified in the participants’
individual development plans, intense workshops, such as
‘Persuasion and influencing’, are run.
Also, this year, LDP participants have engaged in open and
wide-ranging conversations with chief executives as part of their
learning. These sessions have proved to be highly valuable, with
participants learning about a chief executive’s own leadership
development and their thoughts on current issues.
Public Sector Advanced Leadership Programme
seven leaders from the wider Public service continued their
development and learning on LDC’s three-year Public sector
Advanced Leadership Programme (PsALP), which they began in
2010.
PsALP involves each participant in structured learning, personal
reflection and peer group learning and collaboration. The
biggest gains from the programme come from the learning and
knowledge shared to help deal with leadership challenges and
issues and the opportunities to make connections with the other
leaders and chief executives.
21
SECTION TWO PERFORMANCE AND DELIVERY
Leadership in Practice
Leadership in Practice (LiP) continues to be a highly regarded
and relevant programme for tier 3 and 4 leaders. The June 2013
programme included a local government participant, for the
fourth time, which added a valuable perspective and opportunity
for discussion.
We are continually reviewing the LiP content with regard to new
trends and exposing participants to leading management and
leadership thinking. Three programmes during the year included
a session on ‘leadership in complexity’, which participants found
very relevant.
This year we issued iPads to participants to use during the
residential part of the programme. All course material, e-books
and reference material were loaded onto the iPads beforehand,
and are also available from LDC’s website. This well-received
technology has significantly reduced LDCs materials’ costs.
Action Learning Groups
The intention with all of our programmes is that networks
and relationships will be forged and maintained long after the
completion of a programme. Participant feedback confirms that
they continue to get valuable support from each other.
A clear example of building and catalysing connections and
networks are our Action Learning Groups (ALGs) for leaders. The
ALGs have become an important vehicle for generating lasting
relationships and increased understanding across the public
sector.
LDC members of the PsALP recounted the experiences of its
eight-member ALG, at the International Leadership Association
(ILA) 2013 oceania conference. They said that being part of the
group provided each of its members with support and shared
knowledge, which helped them deal with issues and leadership
challenges in their workplaces. They also felt they were better
able to look at how to lead situations, and lead them authentically.
We recognised the need for ALGs to focus on a particular
development area, which we had identified as a gap in current
developing leaders skills and knowledge, and introduced themed
ALGs. Themes have included ‘What great managers do’ and a
Christchurch ALG for senior regional managers. The stand-alone,
themed ALGs have been well supported.
Fellowships
LDC awarded its 2013 fellowships to two leaders: Carolyn risk,
Director, office of the Chief executive at the Department of
Internal Affairs; and robert Brodnax, new Zealand Transport
Agency (nZTA) regional Manager Planning and Investment in the
Waikato/Bay of Plenty region.
Both the Fellows’ applications were seen as being highly relevant
in today’s public service environments, with the results expected
to benefit the wider public service.
robert was identified by nZTA as a high-potential senior leader.
With a focus on change and organisational development, robert
was aiming to enhance his skills at operating in collaborative,
multi-agency environments.
Carolyn’s fellowship focused on issues relating to governance
and accountability for complex collective functions. The aim was
to help Carolyn identify the key principles and implications for
governance in the new Zealand public sector, with a particular
focus on functional leadership roles. As this area is seen as highly
relevant, Carolyn was encouraged by the Fellowship committee
to begin her studies earlier than planned so that the public sector
could reap the benefits sooner.
Events
The LDC events programme for 2012/13 included a range
of international and national leadership experts speaking at
clinics for LDC members. our clinic topics included: complexity,
innovation, leadership for delivering Better Public services and
leader-led development. The speakers included members of
LDC’s provider panel, Alex sutherland, norman Chorn and
Tim roberts and international speakers, Paul Porteous and
Professor David Albury.
annual report 2012/2013
22
Organisationalcapability and performance
our people: LDC is staffed by a small team of professionals who are committed to improving leadership
ability in the public sector.
our providers: The core team is supplemented by a variety of contract staff and the specialist provider panel,
allowing LDC to deliver a wide range of advice, services, resources, events and activities.
Technology
The emphasis in 2012/13 has been on improving business
operations and systems, including our technology infrastructure.
By early 2013, LDC’s major information technology upgrades
were well underway, with the focus on employing the right
providers to provide quality and efficient services.
By the end of 2013, LDC will have the right business
infrastructure in place to suit 21st century requirements. This will
meet our business needs as outlined in our business strategy,
and we will be able to better meet the needs of our members
and interact with them more efficiently.
Part of this improvement work relates to how we deliver our
latest news, research and resources though our website. We will
be able to provide members with richer context and the latest
on leadership developments in accessible and engaging ways.
We will engage with members during the process of refining our
business infrastructure to find out what they would like us to
focus on and how best to interact with them.
A significant aspect of our infrastructure enhancement process
is that it will allow us to collect good quality data more efficiently
in order to assess leadership needs across agencies and the
public sector faster and more accurately.
23
SECTION TWO PERFORMANCE AND DELIVERY
Independent Auditor’s Report To the readers of Leadership Development Centre’s financial statements and statement of service performance
for the year ended 30 June 2013
The Auditor-General is the auditor of Leadership Development Centre (LDC). The Auditor-General has appointed me, Karen
young, using the staff and resources of Audit new Zealand, to carry out the audit of the financial statements and statement of
service performance of LDC on her behalf.
We have audited:
• the financial statements of LDC on pages 27 to 49, that comprise the statement of financial position as at 30 June 2013, the
statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended on
that date and the notes to the financial statements that include accounting policies and other explanatory information; and
• the statement of service performance of LDC on pages 15 to 21.
Opinion
In our opinion:
• the financial statements of LDC on pages 27 to 49:
– comply with generally accepted accounting practice in new Zealand; and
– fairly reflect LDC’s:
– financial position as at 30 June 2013; and
– financial performance and cash flows for the year ended on that date;
• the statement of service performance of LDC on pages 15 to 21:
– complies with generally accepted accounting practice in new Zealand; and
– fairly reflects for each class of outputs:
– its standards of delivery performance achieved, as compared with the forecast standards outlined in the
statement of forecast service performance adopted at the start of the financial year; and
– its actual revenue earned and output expenses incurred, as compared with the forecast revenues and output
expenses outlined in the statement of forecast service performance adopted at the start of the financial year.
our audit was completed on 31 october 2013. This is the date at which our opinion is expressed.
The basis of our opinion is explained below. In addition, we outline the responsibilities of the Board and our responsibilities,
and we explain our independence.
Basis of opinion
We carried out our audit in accordance with the Auditor-General’s Auditing standards, which incorporate the International
standards on Auditing (new Zealand). Those standards require that we comply with ethical requirements and plan and carry
out our audit to obtain reasonable assurance about whether the financial statements and statement of service performance
are free from material misstatement.
Material misstatements are differences or omissions of amounts and disclosures that, in our judgement, are likely to influence
readers’ overall understanding of the financial statements and statement of service performance. If we had found material
misstatements that were not corrected, we would have referred to them in our opinion.
annual report 2012/2013
24
An audit involves carrying out procedures to obtain audit evidence about the amounts and disclosures in the financial
statements and statement of service performance. The procedures selected depend on our judgement, including our
assessment of risks of material misstatement of the financial statements and statement of service performance, whether due
to fraud or error. In making those risk assessments, we consider internal control relevant to the preparation of LDC’s financial
statements and statement of service performance that fairly reflect the matters to which they relate. We consider internal
control in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an
opinion on the effectiveness of LDC’s internal control.
An audit also involves evaluating:
• the appropriateness of accounting policies used and whether they have been consistently applied;
• the reasonableness of the significant accounting estimates and judgements made by the Board;
• the adequacy of all disclosures in the financial statements and statement of service performance; and
• the overall presentation of the financial statements and statement of service performance.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and statement
of service performance. Also we did not evaluate the security and controls over the electronic publication of the financial
statements and statement of service performance.
We have obtained all the information and explanations we have required and we believe we have obtained sufficient and
appropriate audit evidence to provide a basis for our audit opinion.
Responsibilities of the Board
The Board is responsible for preparing financial statements and a statement of service performance that:
• comply with generally accepted accounting practice in new Zealand;
• fairly reflect LDC’s financial position, financial performance and cash flows; and
• fairly reflect its service performance achievements.
The Board is also responsible for such internal control as it determines is necessary to enable the preparation of financial
statements and a statement of service performance that are free from material misstatement, whether due to fraud or error.
The Board is also responsible for the publication of the financial statements and statement of service performance, whether in
printed or electronic form.
The Board’s responsibilities arise from the Public Finance Act 1989, Crown entities Act 2004 and the Trust Deed.
Responsibilities of the Auditor
We are responsible for expressing an independent opinion on the financial statements and statement of service performance
and reporting that opinion to you based on our audit. our responsibility arises from section 15 of the Public Audit Act 2001
and the Public Finance Act 1989.
Independence
When carrying out the audit we followed the independence requirements of the Auditor-General, which incorporate the
independence requirements of the external reporting Board.
As disclosed in LDC’s Annual report, the office of the Controller and Auditor-General along with a number of other
government agencies is a subscriber to LDC.
other than the audit, we have no relationship with or interests in LDC.
Karen Young
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand
LEADERSHIP DEVELOPMENT CENTRE
fINANCIAL STATEmENTS FOR THE YEAR ENDED 30 JUNE 2013
annual report 2012/2013
26
Statement of responsibilityFor THe yeAr enDeD 30 June 2013
In the financial year ended 30 June 2013, the Board of Trustees and the management of The Leadership
Development Centre were responsible for:
• preparing the financial statements, statement of service performance and the judgements used therein
• establishing and maintaining a system of internal control designed to provide reasonable assurance as
to the integrity and reliability of financial and non-financial reporting.
In the opinion of the Board of Trustees and the management of the Leadership Development Centre, the
financial statements and statement of service performance for the financial year reflect fairly the financial
position and operations of the Leadership Development Centre.
Dr Paul reynolds Martin Matthews
Chair Deputy Chair
31 october 2013 31 october 2013
27
SECTION THREE FINANCIAL STATEMENTS 2012/13
Statement of comprehensive incomeFor THe yeAr enDeD 30 June 2013
ACTUAL BUDGET ACTUAL NOTES 2013 2013 2012
INCOmE
revenue from state services Commission 2 500,000 500,000 650,001
Interest income 3 109,338 117,298 125,916
other income 4 2,672,147 2,843,229 3,174,491
Total income 3,281,485 3,460,527 3,950,408
EXPENDITURE
Personnel costs 5 1,434,919 1,567,670 1,346,579
Depreciation and amortisation expense 6, 7 85,478 99,228 79,150
other expenses 8 1,872,136 2,198,260 2,250,636
Total expenditure 3,392,533 3,865,158 3,676,365
SURPLUS/(DEfICIT) BEfORE TAXATION (111,048) (404,631) 274,043
Income tax 9 – – –
Surplus/(deficit) after taxation (111,048) (404,631) 274,043
Other comprehensive income – – –
Total comprehensive income (111,048) (404,631) 274,043
All figures presented Are stAted in new ZeAlAnd dollArs
The accompanying notes form part of these financial statements.Explanations of major variances against budget are provided in Note 29.
annual report 2012/2013
28
Statement of financial positionAs AT 30 June 2013
ACTUAL BUDGET ACTUAL NOTES 2013 2013 2012
ASSETS
Current assets
Cash and cash equivalents 10 1,506,371 266,559 1,331,002
Debtors and other receivables 11 548,893 30,910 1,008,718
Investments 12 2,378,321 2,264,621 2,303,686
Prepayments 13,768 522 123,900
Total current assets 4,447,353 2,562,612 4,767,306
Non-current assets
Property, plant and equipment 13 140,375 229,872 157,466
Intangible assets 14 78,251 – –
Total non-current assets 218,626 229,872 157,466
Total assets 4,665,979 2,792,484 4,924,772
LIABILITIES
Current liabilities
Creditors and other payables 15 247,812 182,014 294,108
employee entitlements 16 81,605 60,249 64,793
GsT payable 236,739 – 212,250
subscriptions received in advance 1,287,015 – 1,235,158
Fellowship contributions received in advance – – 119,000
Fees received in advance 17 331,137 203,891 406,744
Total current liabilities 2,184,308 446,154 2,332,053
Non-current liabilities
Provisions 18 8,245 – 8,245
Total non-current liabilities 8,245 – 8,245
Total liabilities 2,192,553 446,154 2,340,298
Net assets 2,473,426 2,346,330 2,584,474
EqUITy
General funds 19 2,263,991 2,304,551 2,433,296
Fellowship funds 19 209,435 41,779 151,178
Total equity 2,473,426 2,346,330 2,584,474
All figures presented Are stAted in new ZeAlAnd dollArs
The accompanying notes form part of these financial statements.Explanations of major variances against budget are provided in Note 29.
Dr Paul reynolds Martin MatthewsChair Deputy Chair
31 october 2013 31 october 2013
29
SECTION THREE FINANCIAL STATEMENTS 2012/13
Statement of changes in equityFor THe yeAr enDeD 30 June 2013
ACTUAL BUDGET LAST yEAR NOTE 2013 2013 2012
BALANCE AT 1 JULy
General funds 2,433,296 2,707,182 2,155,333
Fellowship funds 151,178 43,779 155,098
Total balance at 1 July 2,584,474 2,750,961 2,310,431
Comprehensive income
surplus/(deficit) (111,048) (404,631) 274,043
other comprehensive income – – –
Total comprehensive income (111,048) (404,631) 274,043
Balance at 30 June 2,473,426 2,346,330 2,584,474
General funds 2,263,991 2,304,551 2,433,296
Fellowship funds 209,435 41,779 151,178
Balance at 30 June 2013 19 2,473,426 2,346,330 2,584,474
All figures presented Are stAted in new ZeAlAnd dollArs
Statement of changes in fellowship fundsFor THe yeAr enDeD 30 June 2013
ACTUAL BUDGET LAST yEAR NOTE 2013 2013 2012
fELLOwSHIP fUNDS AT 1 JULy 151,178 43,779 155,098
INCOmE
Contributions from members 119,000 120,000 126,875
Interest allocated 6,000 3,000 8,000
Total income 125,000 123,000 134,875
EXPENDITURE
Fellowship awarded 66,474 120,000 135,000
General costs 269 5,000 3,795
Total expenditure 66,743 125,000 138,795
Surplus/(deficit) 58,257 (2,000) (3,920)
Balance at 30 June 19 209,435 41,779 151,178
All figures presented Are stAted in new ZeAlAnd dollArs
The accompanying notes form part of these financial statements.Explanations of major variances against budget are provided in Note 29.
annual report 2012/2013
30
Statement of cashflowsFor THe yeAr enDeD 30 June 2013
ACTUAL BUDGET ACTUAL NOTES 2013 2013 2012
CASH fLOwS fROm OPERATING ACTIvITIES
Cash was provided from:
receipts from state services Commission 500,000 500,000 650,001
Interest received 117,291 117,298 123,456
receipts from other revenue 2,981,269 3,159,661 3,428,539
Payments to suppliers (1,911,175) (2,774,441) (2,484,184)
Payments to employees (1,309,141) (1,521,570) (1,299,706)
Goods and services tax (net) 24,489 (162,321) 57,126
Net cash flows from operating activities 20 402,733 (681,373) 475,232
CASH fLOwS fROm INvESTING ACTIvITIES
Proceeds from maturity of investments 2,713,946 1,741,750 5,538,602
Purchase of investments (2,788,581) (1,300,000) (5,745,633)
Purchase of property, plant and equipment (58,214) (181,700) –
Purchase of intangible assets (94,515) – –
Net cash flows from investing activities (227,364) 260,050 (207,031)
NET INCREASE/(DECREASE) IN CASH AND CASH EqUIvALENTS 175,369 (421,323) 268,201
Cash and cash equivalent at the beginning of the year 1,331,002 687,882 1,062,801
Cash and cash equivalent at the end of the year 10 1,506,371 266,559 1,331,002
All figures presented Are stAted in new ZeAlAnd dollArs
The accompanying notes form part of these financial statements.Explanations of major variances against budget are provided in Note 29.
31
SECTION THREE FINANCIAL STATEMENTS 2012/13
Notes to and forming part of the Financial StatementsFor THe yeAr enDeD 30 June 2013
NOTE 1: STATEmENT Of ACCOUNTING POLICIES
Reporting Entity
The Management Development Centre Trust was established by
the signing of a Deed of Trust on 22 July 1994.
The objects of the Trust are to establish a Management
Development Centre in new Zealand for the promotion of
excellence in education, training and development of public
service leaders and managers. The Trust changed its name to
Leadership Development Centre (LDC) on 16 June 2003. LDC
is a Fourth schedule entity under the Public Finance Act 1989
and these accounts are prepared in accordance with the Public
Finance Act 1989 and the Crown entities Act 2004.
Accordingly, LDC has designated itself as a public benefit entity for
the purpose of new Zealand equivalents to International Financial
reporting standards (“nZ IFrs”).
The financial statements for LDC are for the year ended 30 June
2013, and were approved by the Board on 31 october 2013 and
issued on 31 october 2013.
Basis of Preparation
Statement of compliance
The financial statements of LDC have been prepared in
accordance with the requirements of the Crown entities Act
2004, which includes the requirement to comply with generally
accepted accounting practice in new Zealand (“nZ GAAP”).
These financial statements have been prepared in accordance
with nZ GAAP as appropriate for public benefit entities and they
comply with nZ IFrs.
Differential reporting
LDC qualifies for differential reporting as it is not publicly
accountable and is not large. LDC has taken advantage of all
differential reporting exemptions, except for nZ IAs 7 statement
of Cash flows, and Financial Instruments – Credit risk.
Measurement base
The financial statements have been prepared on a historical cost
basis.
Functional and presentation currency
The financial statements are presented in new Zealand dollars
and all values are rounded to the nearest dollar. The functional
currency of LDC is new Zealand dollars (nZ$).
Changes in accounting policies
There have been no material changes in accounting policies
which have been applied on bases consistent with those used in
previous years.
standards, amendments and interpretations issued that are not
yet effective and have not been early adopted.
standards, amendments, and interpretations issued but not
yet effective that have not been early adopted, and which are
relevant to the LDC, are:
nZ IFrs 9 Financial Instruments will eventually replace nZ IAs
39 Financial Instruments: recognition and Measurements. nZ
IAs 39 is being replaced through the following 3 main phases:
Phase 1 Classification and measurement, Phase 2 Impairment
Methodology, and Phase 3 Hedge Accounting. Phase 1 has
been completed and has been published in the new financial
instrument standard nZ IFrs 9. nZ IFrs 9 uses a single
approach to determine whether a financial asset is measured
at amortised cost or fair value, replacing the many different
rules in nZ IAs 39. The approach in nZ IFrs 9 is based on
how an entity manages its financial assets (its business
model) and the contractual cash flow characteristics of the
financial assets. The financial liability requirements are the
same as those of nZ IAs 39, except for when an entity elects
to designate a financial liability at fair value through surplus/
deficit. The new standard is required to be adopted for the
year ended 30 June 2016. However, as a new Accounting
standards Framework will apply before this date, there is no
certainty when an equivalent standard to nZ IFrs 9 will be
applied by public entities.
The Minister of Commerce has approved a new Accounting
standards Framework (incorporating a Tier strategy) developed
by the external reporting Board (XrB). under this Accounting
standard Framework, LDC is classified as Tier 2 reporting entity
and is eligible to apply reduced Disclosures requirements.
These standards are being developed by the XrB based on
current International Public sector Accounting standards.
annual report 2012/2013
32
Notes continuedFor THe yeAr enDeD 30 June 2013
The effective date for the new standards for public sector entities
is expected to be for reporting periods beginning on or after
01 July 2014. This means LDC expects to transition to the new
standards in preparing 30 June 2015 financial statements. As
the PAs are still under development, LDC is unable to assess the
implication of the new Accounting standards Framework at this
time.
Due to the change in the Accounting standards Framework
for public entities, it is expected that all new nZ IFrs and
amendments to existing nZ IFrs will not be applicable to public
benefit entities. Therefore, the XrB has effectively frozen the
financial reporting requirements for public entities up until the
new Accounting standard Framework is effective. Accordingly, no
disclosure has been made about new or amended nZ IFrs that
exclude public benefit entities from their scope.
Prior year comparatives
Prior year comparatives have been reclassified to ensure
comparability with 2013 financial statement disclosures.
Significant Accounting Policies
Revenue
revenue is measured at the fair value of consideration received
or receivable.
Revenue from State Services Commission (SSC)
revenue from ssC is recognised when earned and is reported in
the financial period to which it relates.
revenue from member subscription and services, and services to
other programme participants
“revenue from member subscriptions is recognised when earned
and is reported in the financial period to which it relates.
revenue from services to members and programme participants
is recognised by reference to the stage of completion of the
transaction at the end of the reporting period. The stage of
completion is determined by the most appropriate method to
reliably measure the services performed. “
Interest
Interest income is recognised in the statement of comprehensive
income as it accrues, using the effective interest method.
Fellowship grants
Fellowship grants awarded are recognised as expenditure at the
time the awards are approved by LDC.
Foreign currency transactions
Foreign currency transactions are translated into new Zealand
dollars at the exchange rate ruling at the date of payment.
Monetary assets and liabilities at balance date are translated at
the year end exchange rates.
Operating leases
Leases where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased items are classified
as operating leases. operating lease expenses are recognised on
a straight-line basis over the term of the lease and the lease cost
is included in the statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held
at call with banks, and other short-term highly liquid investments
with original maturities of three months or less.
Debtors and other receivables
Debtors and other receivables are recorded at their face value,
less any provision for impairment.
Impairment of a receivable is established when there is objective
evidence that LDC will not be able to collect amounts due
according to the original terms of the receivable. significant
financial difficulties of the debtor, probability the debtor will
enter into bankruptcy, and default in payments are considered
indicators that the debtor is impaired. The amount of the
impairment is the difference between the asset’s carrying
amount and the present value of estimated future cash flows,
discounted using the original effective interest rate. The carrying
amount of the asset reduced through the use of an allowance
account, and the amount of loss is recognised in the statement
of comprehensive income. When the receivables is uncollectible,
it is written off against the allowance account for receivables.
overdue receivables that have been renegotiated are classified as
current (i.e. not past due). LDC has not provided for any doubtful
debts, and the majority of the receivables are less than 30 days.
Collection of receivables is not issue for LDC and has not been in
prior years.
33
SECTION THREE FINANCIAL STATEMENTS 2012/13
Notes continuedFor THe yeAr enDeD 30 June 2013
Investments
Investments comprise of term deposits with original maturities
of three months or more. Investments in bank deposits are initially
measured at fair value plus transaction costs.
After initial recognition investments in bank deposits are
measured at amortised cost using the effective interest method,
less any provision for impairment.
For bank deposits, impairment is established when there is
objective evidence that LDC will not be able to collect amounts
due according to the original terms of the deposit. significant
financial difficulties of the bank, probability that the bank will
enter into receivership or liquidation, and default in payments are
considered indicators that the deposit is impaired.
Property, plant and equipment
Property, plant and equipment asset classes consist of leasehold
improvements, furniture and fixtures, office equipment and
computer equipment. All asset classes are measured at cost less
accumulated depreciation and impairment losses.
Additions
The cost of an item of property, plant and equipment is recognised
as an asset only when it is probable that future economic benefits
or service potential associated with the item will flow to LDC and
the cost of the item can be measured reliably.
Disposals
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount of the asset. Gains and losses
on disposals are included in the statement of comprehensive
income.
Subsequent costs
Costs incurred subsequent to initial acquisition are capitalised
only when it is probable that future economic benefits or service
potential associated with the item will flow to LDC and the cost of
the item can be measured reliably.
The costs of day-to-day servicing of property, plant and equipment
are recognised in the statement of comprehensive income as
they are incurred.
Depreciation
Depreciation is provided on a straight-line basis on all property,
plant and equipment, at rates that will write-off the cost (or
valuation) of the assets to their estimated residual values over
their useful lives. The useful lives and associated depreciation
rates of major classes of assets have been estimated as follows:
Leasehold improvements 6 years 16.7%
Furniture and fixtures 4 years 25.0%
office equipment 4 years 25.0%
Computer equipment 4 years 25.0%
Leasehold improvements are depreciated over the unexpired
period of the lease or estimated remaining useful lives of the
improvements, whichever is the shorter.
The residual value and useful life of an asset is reviewed, and
adjusted if applicable, at each financial year-end.
Intangible assets
Software acquisition and development
Acquired computer software licenses are capitalised on the basis
of the costs incurred to acquire and bring to use the specific
software.
Costs that are directly associated with the development of
systems and programmes, and directly associated with the
provision of services to customers are recognised as an intangible
assets only when it is probable that the future economic benefits
will flow to LDC and the cost of the item can be measured
reliably.
staff training costs are recognised as an expense when incurred.
Costs associated with maintaining computer software are
recognised as an expense when incurred.
Amortisation
The carrying value of an intangible asset with a finite life is
amortised on a straight line basis over its useful life. Amortisation
begins when the asset is available for use and ceases at the date
that the asset is derecognised. The amortisation charge for each
period is recognised in the statement of comprehensive income.
The useful lives and associated amortisation rates of major
classes of intangible assets have been estimated as follows:
Computer software 3 years 33%
system development 3 years 33%
annual report 2012/2013
34
Impairment of property, plant, and equipment and intangible assets
Property, plant, and equipment and intangible assets that have
a finite useful life are reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use.
Value in use is depreciated replacement cost for an asset where
the future economic benefits or service potential of the asset are
not primary dependent on the asset’s ability to generate net cash
inflows and where LDC would, if deprived of the asset, replace its
remaining future economic benefits or service potential.
If an asset’s carrying amount exceeds is recoverable amount, the
asset is impaired and the carrying amount is written down to the
recoverable amount.
The total impairment loss is recognised in the statement of
comprehensive income.
The reversal of the impairment loss is recognised in the statement
of comprehensive income.
Creditors and other payables
Creditors and other payables are recorded at their face value.
Employee entitlements
employee entitlements consists mainly of annual leave which are
measured at current rates of pay and expected to be taken within
twelve months. This annual leave is earned but not yet taken at
balance date.
employees entitlements are classified as a current liability.
Superannuation schemes
obligations for contributions to Kiwisaver are accounted for as
defined contribution superannuation scheme and are recognised
as an expenses in the statement of comprehensive income as
incurred.
Provisions
LDC recognises a provision for future expenditure of uncertain
amount or timing when there is a present obligation (either legal
or constructive) as a result of a past event, it is probable that
expenditures will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Equity
LDC’s equity is measured as the difference between the total
assets and total liabilities. equity is disaggregated and classified
into the following components.
• general funds; and
• fellowship funds.
Good and Service Tax (GST)
All items in the financial statements are presented exclusive of
GsT, except for receivables and payables, which are presented on
a GsT-inclusive basis. Where GsT is not recoverable as input tax
then it is recognised as part of the related asset or expenses.
The net amount of GsT recoverable from, or payable to the Inland
revenue Department (IrD) is included as part of receivables or
payables in the statement of financial position.
The net GsT paid to, or received from the IrD, including the GsT
related to investing and financing activities is classified as an
operating cash flow in the statement of cash flows.
Commitments and contingencies are disclosed exclusive of GsT.
Income tax
LDC is taxable on its profits under the provision of Income Tax Act.
Income tax is calculated using taxes payable method.
Membership levy income is not liable for income tax.
Budget figures
The budget figures have been prepared in accordance with nZ
IFrs, using accounting policies that are consistent with those
adopted by LDC for the preparations of the financial statements.
Cost allocation
LDC has determined the cost of outputs using the cost allocation
system outlined below.
Direct costs are those costs directly attributed to an output.
Indirect costs are those that cannot be identified in an
economically feasible manner with a specific output.
Notes continuedFor THe yeAr enDeD 30 June 2013
35
SECTION THREE FINANCIAL STATEMENTS 2012/13
Notes continuedFor THe yeAr enDeD 30 June 2013
NOTE 2: REvENUE fROm STATE SERvICES COmmISSION (SSC)
LDC has been provided with funding from ssC for the specific purposes of the Commission as set out in its founding legislation and
the scope of the relevant government appropriation. Apart from these general restrictions, there are no unfulfilled conditions or
contingencies attached to government funding (2012 nil).
Actual Budget Actual 2013 2013 2012 $ $ $
ssC Funding 500,000 500,000 650,001
Total revenue from State Services Commission 500,000 500,000 650,001
NOTE 3: INTEREST INCOmE
Actual Budget Actual 2013 2013 2012 $ $ $
Interest earned 103,338 114,298 113,916
Fellowship interest 6,000 3,000 12,000
Total interest income 109,338 117,298 125,916
NOTE 4: OTHER INCOmE
Actual Budget Actual 2013 2013 2012 $ $ $
Membership levies 1,234,561 1,333,665 1,295,553
Leadership in practice (LiP) fees 480,202 530,200 670,933
Leadership development programme (LDP) fees 172,637 251,364 54,545
event and seminar fees 156,939 165,000 244,220
Advisory services 279,165 150,000 457,393
Fellowship contributions 119,000 120,000 126,875
executive leadership learning network (eLLn) fees 110,000 120,000 –
Public sector advanced leadership programme (PsALP) fees 90,289 90,000 285,847
Knowledge and information fees 1,600 27,000 –
other income 27,754 56,000 39,125
Total other income 2,672,147 2,843,229 3,174,491
annual report 2012/2013
36
NOTE 5: PERSONNEL COSTS
Actual Budget Actual 2013 2013 2012 $ $ $
ACC levies 5,172 8,000 8,263
eAP, supervision and coaching 1,200 1,250 –
General personnel 4,960 6,350 4,334
recruitment 20,154 10,500 52,240
salaries and wages 1,281,014 1,377,709 1,088,815
Kiwisaver employers contribution 20,013 29,861 23,317
employer superannuation contribution tax (esCT) 8,115 – –
Increase/(decrease) in employee entitlements 16,811 – 10,360
staff training and team activities 14,398 20,000 29,697
Temporary and contractor staff 63,082 114,000 129,553
Total personnel costs 1,434,919 1,567,670 1,346,579
NOTE 6: DEPRECIATION EXPENSE
Actual Budget Actual 2013 2013 2012 $ $ $
Leasehold improvements 54,698 58,503 66,383
Furniture and fixtures 3,109 4,195 5,626
office equipment 729 1,500 1,086
Computer equipment 10,678 35,030 6,055
Total depreciation expense 69,214 99,228 79,150
NOTE 7: AmORTISATION EXPENSE
Actual Budget Actual 2013 2013 2012 $ $ $
Computer software 9,129 – –
system application 7,135 – –
Total amortisation expense 16,264 – –
Notes continuedFor THe yeAr enDeD 30 June 2013
37
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 8: OTHER EXPENSES
Actual Budget Actual 2013 2013 2012 $ $ $
mAINTENANCE
Computer and IT services 54,076 67,000 57,331
Licences and fees 4,169 19,800 3,144
other equipment maintenance 87 – –
Premises maintenance 2,660 1,250 2,118
60,992 88,050 62,593
COmmUNICATIONS
Phone and internet charges 30,918 24,300 49,647
Photocopying 10,878 17,000 15,385
Postage, freight and couriers 3,761 6,300 5,480
Publications and information bought 29,953 17,297 32,221
Printing and publication 21,610 52,160 79,510
Corporate subscription 4,264 1,070 3,052
Website development – 44,000 3,039
101,384 162,127 188,334
TRAvEL
Accommodation and meals 59,140 125,500 43,923
Car rental, mileage and parking 1,184 360 2,408
Air travel 18,568 57,500 13,235
Taxi, bus and train fares 3,603 4,150 7,309
Conferences 1,087 3,000 9,077
83,582 190,510 75,952
PROfESSIONAL fEES
external experts 39,207 34,250 41,853
Audit fee for financial audit 33,059 25,000 28,145
Consultants 66,251 105,784 62,588
138,517 165,034 132,586
CONTRACTORS
Contractors 1,004,308 1,012,845 1,338,594
1,004,308 1,012,845 1,338,594
mARkETING AND STAkEHOLDER RELATIONS
Fellowship awarded 66,474 120,000 135,000
Fellowship costs 269 5,000 3,795
sponsorship 15,000 10,000 10,000
stakeholder relations 39,173 90,700 41
LDC corporate resources 91,886 90,000 50,703
212,802 315,700 199,539
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
38
NOTE 8: OTHER EXPENSES CONTINUED
Actual Budget Actual 2013 2013 2012 $ $ $
GENERAL EXPENSES
Archive expenses 2,097 2,574 3,444
Bank fees 1,547 3,060 1,910
Catering 57,258 27,300 64,419
operating lease expense 138,000 169,100 108,000
Cleaning 11,776 11,220 9,198
electricity 4,428 4,200 3,963
General expenses 2,048 1,920 8,358
Insurance 1,747 2,600 2,620
Minor assets 3,341 1,000 –
office and kitchen supplies 9,830 7,320 10,418
Venue and equipment hire 32,388 33,700 40,708
Loss on disposal of fixed assets 6,091 – –
270,551 263,994 253,038
Total other expense 1,872,136 2,198,260 2,250,636
NOTE 9: INCOmE TAX
Actual Budget Actual 2013 2013 2012 $ $ $
surplus/(deficit) before taxation (111,048) (404,631) 274,043
non-assessable income
Membership levies (1,234,561) (1,333,665) (1,295,553)
non-deductible expenses
Accounting depreciation 85,478 99,228 79,150
Accounting depreciation –2012 13,687 – (13,687)
Tax depreciation (74,136) (34,370) (49,531)
Holiday pay closing 81,605 60,249 64,793
Holiday pay opening (64,793) (60,249) (54,433)
Make good provision – – 8,245
Adjusted surplus/(deficit) before taxation (1,303,768) (1,673,438) (986,973)
Tax losses @33% not recognised (430,243) (552,235) (325,701)
Current year tax provision – – –
Tax losses of $9,625,347 (2012 $8,317,266) are available to carry forward and offset against taxable income. Income tax is calculated using
the taxes payable method.
Notes continuedFor THe yeAr enDeD 30 June 2013
39
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 10: CASH AND CASH EqUIvALENTS
Actual Budget Actual 2013 2013 2012 $ $ $
Cash at bank – cheque account 528,634 266,559 423,769
Cash at bank – savings account 577,634 – –
Petty cash 103 – 200
Money market – – 500,000
Term deposits with maturities less than 3 months 400,000 – 407,033
Total cash and cash equivalents 1,506,371 266,559 1,331,002
The carrying value of cash in bank and short-term deposits with maturities less than three months approximates their fair value.
The effective interest rate for cash and cash equivalent is 2.75% (2012: 3.75%).
NOTE 11: DEBTORS AND OTHER RECEIvABLES
Actual Budget Actual 2013 2013 2012 $ $ $
Accounts receivable 535,769 2,587 987,641
Accrued interest 13,124 16,929 21,077
GsT refund due – 11,394 –
Total debtors and other receivables 548,893 30,910 1,008,718
The carrying value of receivables approximates their fair value.
NOTE 12: INvESTmENTS
Actual Budget Actual 2013 2013 2012 $ $ $
Term deposits 2,378,321 2,264,621 2,303,686
Total investments 2,378,321 2,264,621 2,303,686
The carrying value of the short term deposits with maturity dates of three months or more approximates their fair value. The effective
interest rate for investment is 3.25% (2012:4%)
There were no impairment provisions for investments. At each balance sheet date, LDC assesses whether there is any objective
evidence that an investment is impaired.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
40
NOTE 13: PROPERTy, PLANT AND EqUIPmENT
Movements for each class of property, plant and equipment are as follows:
Leasehold furniture Office Computer Improvements and fixtures equipment equipment Total $ $ $ & $
COST OR vALUATION
Balance at 1 July 2011 327,819 136,672 24,506 105,340 594,337
Additions – – – – –
Disposals – – – – –
Balance at 30 June 2012 327,819 136,672 24,506 105,340 594,337
Balance at 1 July 2012 327,819 136,672 24,506 105,340 594,337
Additions – 695 4,570 52,950 58,215
Disposals/Write-offs – (37,152) (8,701) (103,345) (149,198)
Transfer to assets held for sale – – – – –
Balance at 30 June 2013 327,819 100,215 20,375 54,945 503,354
ACCUmULATED DEPRECIATION AND ImPAIRmENT LOSSES
Balance at 1 July 2011 113,051 128,057 23,420 93,193 357,721
Depreciation expense 66,383 5,626 1,086 6,055 79,150
elimination on disposal – – – – –
Disposals – – – – –
Balance at 30 June 2012 179,434 133,683 24,506 99,248 436,871
Balance at 1 July 2012 179,434 133,683 24,506 99,248 436,871
Depreciation expense 54,698 3,109 729 10,678 69,214
elimination on disposal – – – – –
Disposals/Write-offs – (37,185) (8,668) (97,253) (143,106)
reversal of impairment losses – – – – –
Balance at 30 June 2013 234,132 99,607 16,567 12,673 362,979
CARRyING AmOUNTS
At 1 July 2011 214,768 8,615 1,086 12,147 236,616
At 30 June and 1 July 2012 148,385 2,989 – 6,092 157,466
At 30 June 2013 93,687 608 3,808 42,272 140,375
Notes continuedFor THe yeAr enDeD 30 June 2013
41
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 14: INTANGIBLE ASSETS
Internally Acquired generated software software Total $ $ $
COST OR vALUATION
Balance at 1 July 2011 – 434,927 434,927
Additions – – –
Disposals – – –
Balance at 30 June 2012 – 434,927 434,927
Balance at 1 July 2012 – 434,927 434,927
Additions 30,295 64,220 94,515
Disposals/Write-offs – (434,927) (434,927)
Balance at 30 June 2013 30,295 64,220 94,515
ACCUmULATED DEPRECIATION AND ImPAIRmENT LOSSES
Balance at 1 July 2011 – 434,927 434,927
Amortisation expense – – –
Disposals – – –
Impairment losses – – –
Balance at 30 June 2012 – 434,927 434,927
Balance at 1 July 2012 – 434,927 434,927
Amortisation expense 9,129 7,135 16,264
Disposals/Write-offs – (434,927) (434,927)
Impairment losses – – –
Balance at 30 June 2013 9,129 7,135 16,264
CARRyING AmOUNTS
At 1 July 2011 – – –
At 30 June and 1 July 2012 – – –
At 30 June 2013 21,166 57,085 78,251
There are no restrictions over the title of LDC’s intangible assets, nor are any intangible assets pledged as security for liabilities.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
42
NOTE 15: CREDITORS AND OTHER PAyABLES
Actual Budget Actual 2013 2013 2012 $ $ $
Trade creditors 166,712 182,014 206,459
Accrued expenses 81,100 – 87,649
Total creditors and other payables 247,812 182,014 294,108
Creditors and payables are non-interest bearing and are normally settled on 30-day terms. Therefore the carrying value of creditors and
other payables approximates their fair value.
NOTE 16: EmPLOyEE ENTITLEmENTS
Actual Budget Actual 2013 2013 2012 $ $ $
Annual leave 81,605 60,249 64,793
Total employee entitlements 81,605 60,249 64,793
NOTE 17: fEES RECEIvED IN ADvANCE
Actual Budget Actual 2013 2013 2012 $ $ $
Leadership in Practice (LiP) 173,558 59,800 94,300
Public sector Advanced Learning Programme (PsALP) 1,950 – 92,239
Leadership Development Programme (LDP) 142,819 144,091 95,455
system Advisory services (sAs) 12,810 – –
events and seminars – 124,750
Total fees received in advance 331,137 203,891 406,744
NOTE 18: PROvISIONS
Actual Budget Actual 2013 2013 2012 $ $ $
CURRENT PORTION
restructuring – – –
Lease make-good – – –
Total current portion – – –
NON-CURRENT PORTION
restructuring – – –
Lease make-good 8,245 – 8,245
Total non-current portion 8,245 – 8,245
Total provisions 8,245 – 8,245
Notes continuedFor THe yeAr enDeD 30 June 2013
43
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 18: PROvISIONS CONTINUED
Movements for each class of provision are as follows:
Lease Restructuring make-good Total $ $ $
Balance at 1 July 2011 64,000 30,000 94,000
Additional provision made – – –
Amounts used (54,050) – (54,050)
unused amounts reversed (9,950) (21,755) (31,705)
Discount unwind – – –
Balance at 30 June 2012 – 8,245 8,245
Balance at 1 July 2012 – 8,245 8,245
Additional provision made – – –
Amounts used – – –
unused amounts reversed – – –
Discount unwind – – –
Balance at 30 June 2013 – 8,245 8,245
Restructuring provision
The Board approved a restructuring plan, which was announced in May 2011.
The restructuring commenced in June 2011. The restructuring plan and associated payments were expected to be completed by
December 2011. The provision represented the estimated costs for redundancy payments arising from the restructure and the
resourcing of the revised structure.
The restructure was completed by June 2012.
Lease make-good provision
In respect of the lease premises, LDC is required at the expiry of the lease term to make good any damage caused to the premises and
to remove any fixtures or fittings installed by LDC. Information about LDC’s leasing arrangements is disclosed in note 21.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
44
NOTE 19: EqUITy
Actual Budget Actual 2013 2013 2012 $ $ $
GENERAL fUNDS
Balance at 1 July 2,433,296 2,707,182 2,155,333
surplus/(deficit) (169,305) (402,631) 277,963
Balance at 30 June 2,263,991 2,304,551 2,433,296
fELLOwSHIP fUNDS
Balance at 1 July 151,178 43,779 155,098
surplus/(deficit) 58,257 (2,000) (3,920)
Balance at 30 June 209,435 41,779 151,178
Total equity 2,473,426 2,346,330 2,584,474
NOTE 20: RECONCILIATION Of NET SURPLUS/(DEfICIT) TO NET CASH fROm OPERATING ACTIvITIES
Actual Actual 2013 2012 $ $
NET SURPLUS/(DEfICIT) fOR THE yEAR (111,048) 274,043
Add/(less) non-cash items
Amortisation 16,264 –
Depreciation 69,214 79,150
Loss on disposal of fixed assets 6,091 –
Total non-cash items 91,569 79,150
Add/(less) movements in statement of financial items position items
Inc/(Dec) in debtors and other receivables 459,825 899,431
Inc/(Dec) in prepayments 110,132 (44,675)
Inc/(Dec) in creditors and other payables (46,296) (148,250)
Inc/(Dec) in employee entitlements 16,812 10,360
Inc/(Dec) in GsT payable 24,489 (65,104)
Inc/(Dec) in subscriptions received in advance 51,857 (55,562)
Inc/(Dec) in fellowship contributions received in advance (119,000) (7,375)
Inc/(Dec) in fees received in advance (75,607) (466,786)
Net movements in working capital items 422,212 122,039
Net cash flow from operating activities 402,733 475,232
Notes continuedFor THe yeAr enDeD 30 June 2013
45
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 21: COmmITmENTS AND OPERATING LEASES
Operating leases as lessee
The future aggregate minimum lease payments to be paid under non-cancellable operating lease are as follows:
Actual Actual 2013 2012 $ $
not later than one year 138,000 144,545
not later than one year and not later than two years 138,000 138,000
More than two years and not later than five years 34,500 172,500
Total operating lease commitments 310,500 455,045
LDC leases space in Maritime House. The lease expired in september 2012. The right of renewal was exercised and the lease has been
re-signed for a further three years from 1 october 2012. LDC has recognised a make good provision in respect to this lease.
The lease expires in october 2015. LDC does not have the option to purchase the asset at the end of the lease term. There are no
restrictions placed on LDC by any of its leasing arrangements.
There were no capital commitments as at 30 June 2013. (2012 $0)
NOTE 22: CONTINGENT ASSETS AND LIABILITIES
LDC has no contingent assets or contingent liabilities as at 30 June 2013. (2012:$0)
NOTE 23: RELATED PARTy TRANSACTIONS
All related party transactions have been entered into an arm’s length basis.
Significant transactions with-government-related entities LDC has been provided with funding from the state services Commission of $500,000 (2012: $650,001).
Collectively, but not individually, significant, transactions with government-related entities In conducting its activities, LDC is required to pay various taxes and levies (such as GsT, PAye, and ACC levies) to the Crown and entities
related to the Crown. The payment of theses taxes and levies, other than income tax, is based on the standard terms and conditions
that apply to all tax and levy payers.
LDC also receives income from entities controlled, significantly influences, or jointly controlled by the Crown. revenue from these
government-related entities for the year ended 30 June 2013 totalled $3.1 million (2012: $3.1 million). This revenue includes payment of
membership fees from all other member agencies (member agencies are set out in B of the Annual report).
LDC’s direct spending on programmes, courses, seminars, events and fellowships is primarily for the benefit of staff from our member
agencies.
LDC also purchases goods and services from entities controlled, significantly influenced, or jointly controlled by the Crown. Purchases
from these government-related entities for the year ended 30 June 2013 totalled $10,779 (2012 $19,517). These purchases included the
purchase of electricity from Genesis, air travel from Air new Zealand, and postal services from new Zealand Post.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
46
NOTE 23: RELATED PARTy TRANSACTIONS CONTINUED
The schedule below lists related party transactions for the agencies of LDC’s Board of Trustees members.
Actual Actual 2013 2012 Board members Agency $ $
REvENUE RECEIvED fROm RELATED PARTIES
P reynolds Ministry for the environment 54,000 61,000
M Hollings Te Aho o Te Kura Pounanu – The Correspondence school 21,000 22,000
A Morrision Department of Conservation 82,000 70,000
M Matthews Ministry of Transport 50,000 20,000
I rennie state services Commission 523,000 672,000
C MacDonald Department of Internal Affairs 115,000 158,000
C Tremain new Zealand Customs service 19,000 55,000
r Jones new Zealand Defence Force 111,000 116,000
RECEIvABLES DUE fROm RELATED PARTIES
P reynolds Ministry for the environment 13,000 11,000
M Hollings Te Aho o Te Kura Pounanu – The Correspondence school 15,000 –
A Morrision Department of Conservation 58,000 70,000
I rennie state services Commission – 60,000
C MacDonald Department of Internal Affairs 11,000 61,000
C Tremain new Zealand Customs service 44,000 –
r Jones new Zealand Defence Force – 75,000
CREDIT NOTES ISSUED TO RELATED PARTIES
P reynolds Ministry for the environment – 14,000
I rennie state services Commission – 55,000
C MacDonald Department of Internal Affairs – 11,000
C Tremain new Zealand Customs service – 2,000
r Jones new Zealand Defence Force – 5,000
PAymENTS TO RELATED PARTIES
I rennie state services Commission – 2,000
C MacDonald Department of Internal Affairs – 15,000
Notes continuedFor THe yeAr enDeD 30 June 2013
47
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 24: TRUSTEES REmUNERATION
Trustees work in an honorary capacity and receive no remuneration (2012:nil).
NOTE 25: EmPLOyEE REmUNERATION
Actual Actual 2013 2012 $ $
TOTAL REmUNERATION PAID OR PAyABLE
$100,000 – $109,999 1 –
$110,000 – $119,999 – –
$120,000 – $129,999 – –
$130,000 – $139,999 2 –
$140,000 – $149,999 – –
$150,000 – $159,999 – 1
$170,000 – $179,999 1 –
$200,000 – $210,000 1 1
Total employees 5 2
NOTE 26: EvENTS AfTER THE BALANCE SHEET DATE
There were no significant events after the balance date.
NOTE 27: fINANCIAL INSTRUmENTS
Financial instrument categories
The carrying amounts of financial assets and liabilities in each of the nZ IAs 39 categories are as follows:
Actual Actual 2013 2012 $ $
LOANS AND RECEIvABLES
Cash and cash equivalents 1,506,371 1,331,002
Debtors and other receivables 548,893 1,008,718
Investments – term deposits 2,378,321 2,303,686
Total loans and receivables 4,433,585 4,643,406
fINANCIAL LIABILITIES mEASURED AT AmORTISED COST
Creditors and other payables (excluding income in advance) 247,812 294,108
Total financial liabilities measured at amortised cost 247,812 294,108
Financial instrument risk
LDC’s activities expose it to variety of financial instrument risks, including credit risk and liquidity risk. LDC has series of policies to
manage the risks associated with financial instruments and seeks to minimise exposure from financial instruments. These policies do
not allow any transactions that are speculative in nature to be entered into.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
48
NOTE 27: fINANCIAL INSTRUmENTS CONTINUED
Fair values
The carrying values of the financial instruments approximates their fair value.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign
exchange rates.
LDC had minimal foreign currency risk on its financial instruments at 30 June 2013 or during the financial year.
Credit risk
Credit risk is the risk that a third party will default on its obligation to LDC, causing it to incur a loss.
Due to the timing of its cash inflows and outflows, LDC invest surplus cash with a registered bank in new Zealand.
LDC has processes in place to review the credit quality of customers prior to the granting of credit.
In the normal; course of business, LDC is exposed to credit risk from cash and term deposits with bank, debtors and other
receivables. For each of these, the maximum credit exposure is best represented by the carrying amount in the statement of financial
position.
Liquidity risk
Liquidity risk is the risk that LDC will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity
risk management implies maintaining sufficient cash.
LDC mostly manages liquidity risk by continuously monitoring forecast and actual cash flow requirements.
NOTE 28: CAPITAL mANAGEmENT
LDC’s capital is its equity, which comprises accumulated funds. equity is represented by net assets.
LDC is subject to the financial management and accountability provisions of the Crown entities Act 2004, which impose restrictions in
relation to borrowings, acquisition of securities, issuing guarantees and indemnities and the use of derivatives.
LDC manages its equity as a by-product of prudently managing revenues, expenses, assets, liabilities, investments, and general
financial dealings to ensure that LDC effectively achieves its objectives and purpose, whilst remaining a going concern.
NOTE 29: EXPLANATION Of SIGNIfICANT vARIANCES AGAINST BUDGET
explanations for major variances from the LDC’s budgeted figures in the statement of intent are as follows:
Statement of comprehensive income
Income
revenue was less than budgeted by $179,000 due to a different mix of fee revenue than expected such as:
Membership levies were down by $99,000 mainly due to Housing new Zealand and Police not renewing their membership for
financial year 2012/13.
Leadership in Practice fees less than budgeted by $ 50,000 due to one scholarship place being offered to soLGM and two people
unable to attend.
Notes continuedFor THe yeAr enDeD 30 June 2013
49
SECTION THREE FINANCIAL STATEMENTS 2012/13
NOTE 29: EXPLANATION Of SIGNIfICANT vARIANCES AGAINST BUDGET CONTINUED
Leadership Development Programme revenue was down by $79,000 due to the delayed commencement associated the Career
Board process.
Advisory services were more than budgeted by $129,000 due to increase uptake of assessment for development.
Expenditure
expenditure was less than budgeted by $463,000. The major areas below budget were personnel costs and other expenses.
Personnel costs
Personnel costs were down by $133,000 reflecting the mix of permanent and fixed term staff during the year.
Other expenses
Communication costs were below budget by $61,000 due to delays in spending website improvements. The delay is mainly
attributable to prioritising project delivery. This is now budgeted in the next financial year.
Travel expenses were less than budgeted by $107,000 mainly due to lower than budgeted accommodation and meal costs for the
Leadership Development Programme and the leveraging from existing travel plans of overseas speakers rather than LDC paying to
bring speakers over.
Marketing and stakeholder relations expenses were below budget by $103,000 due to two fellowships awarded rather than the three
budgeted for, and expected stakeholder expenses being held over as part of the website project.
Statement of financial position
Current assets
Cash and cash equivalent were more than budgeted by $1.2 million mainly due to 2013/14 levies paid by the majority of members
in June 2013, rather than in July 2013 as budgeted.
Debtors and other receivables were above budget by $518,00 due to advance invoices for 2013/14 subscription levies.
Term investments were more than budgeted by $114,000 due to increase in funds, a result of early payments of membership
levies from agency members.
Non-current assets
Property, plant and equipment were below budget by $88,000 due to less spending in computer equipment.
Intangible assets
Intangible assets has total cost of $78,000 but with nil budget. This was spent for the development of Mobile Learning Application
which was used as a reference tool to implement Mobile Learning for Leadership in Practice programme.
Budget was taken from the unspent budget in computer equipment of $88,000.
Liabilities
Current liabilities were above budget by $1.7 million , a result of 2013/14 subscriptions levies received in advance from members
rather than in next financial year as budgeted. In addition, higher creditors and other payables were due to completion of creditors
contracts at end of financial year.
Statement of cash flows
overall net cash flow for the year ended 30 June 2013 was $1,500,000. This was higher than the budgeted inflow of $267,000 as a
result of payments received in advance for 2013/14 subscription levies.
Notes continuedFor THe yeAr enDeD 30 June 2013
annual report 2012/2013
50
Appendix A: Directory
OffICE Leadership Development Centre
Level 12
Maritime Tower
10 Customhouse Quay
Wellington
POSTAL ADDRESS Po BoX 2460
Wellington 6140
lp 64 4 473 2222
lf 64 4 473 2223
lw www.ldc.govt.nz
Auditor Karen young
Audit new Zealand
Wellington
on behalf of the Controller and Auditor-General
Bankers Westpac Bank, Wellington
51
SECTION FOUR APPENDICIES
Appendix B: LDC member agencies 2012/13
• Antarctica new Zealand
• Careers new Zealand
• Civil Aviation Authority
• Commerce Commission
• Creative new Zealand
• Crown Law office
• Department of Conservation
• Department of Corrections
• Department of Internal Affairs
• Department of the Prime Minister and Cabinet
• Dispute resolution services
• earthquake Commission
• education review office
• electoral Commission
• environmental Protection Authority
• Families Commission
• Government Communications security Bureau
• Health Promotion Agency
• Health Quality and safety Commission
• Human rights Commission
• Independent Police Authority
• Inland revenue Department
• Land Information new Zealand
• Ministry for Culture and Heritage
• Ministry for Primary Industries
• Ministry for the environment
• Ministry of Business, Innovation and employment
• Ministry of Defence
• Ministry of education
• Ministry of Foreign Affairs and Trade
• Ministry of Health
• Ministry of Justice
• Ministry of Pacific Island Affairs
• Ministry of social Development
• Ministry of Transport
• Ministry of Women’s Affairs
• Museum of new Zealand Te Papa Tongarewa
• new Zealand Productivity Commission
• new Zealand Qualifications Authority
• new Zealand security Intelligence service
• new Zealand symphony orchestra
• new Zealand Transport Agency
• new Zealand Walking Access Commission
• new Zealand Customs service
• new Zealand Defence Force HQ
• office of the Clerk of the House
• office of the Controller and Auditor-General
• Parliamentary Counsel office
• Parliamentary service
• Pharmaceutical Management Agency
• real estates Agents Authority
• serious Fraud office
• sport and recreation new Zealand
• state services Commission
• statistics new Zealand
• Te Aho o Te Kura Pounamu – The Correspondence school
• Te Mangai Paho
• Te Puni Kokiri − Ministry of Maori Development
• Te Taura Whiri i te reo Maori − Maori Language Commission
• Tertiary education Commission
• The Treasury
level 12 i mArine tower i 10 customhouse quAy i po box 2460 i wellington 6140 i new ZeAlAnd