Annual Report
2008–2009
E.77
Te Pou Oranga Kai o Aotearoa
Food safety: the numbers
We have:
During 2008/09:
• approximately 500 staff working at over
• we processed over 8500 applications for
80 locations throughout New Zealand
approvals, appointments and authorisations
• we added or revised 8417 maximum residue
• a diverse workforce:
• staff from 24 different nationalities
• our oldest staff member is 75 and our
youngest is 21
limits (MRLs) to the database we provide for
exporters of 74 different horticultural crops
for export. This database shows the MRLs that
have been established in 19 countries for
298 pesticides
We manage:
• more than 450 different laws, regulations
• we conducted over 1200 investigations
of food complaints
and standards
• we gazetted 153 amendments to these
• we conducted over 163 audits of food
production operations
over the last year
• we issued more than 120,000 export
certificates and 400,000 electronic
eligibility documents for New Zealand food
products destined for 90 different countries
• our animal products electronic certification
system was available online 99.89%
of the year
• we received and provided assistance to more
than 3700 phone calls to our 0800 helpline
and more than 4800 emails to our website
help address
We earned: ($000)
Revenue Crown
Revenue Other
Gains
Total income
34,872
60,882
109
95,863
Total assets
Total taxpayers funds
24,967
3,167
We spent: ($000)
Personnel costs
Depreciation
Capital charge
Other operating costs
Total operating expenditure
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
52,165
3,166
87
39,940
95,358
Contents
Minister’s foreword
2
Chief Executive’s foreword 3
Our performance 2008/09
4
Improving the safety and suitability of food
4
Less sickness from pathogens in food
4
Residue levels in food are safe 5
New Zealand businesses produce safe food
8
Food meets consumer expectations in labelling and composition
9
Working with Australia to improve the safety and suitability of food
9
Food safety emergencies are well managed
Improved business opportunities through safe and suitable food
10
12
We helped New Zealand export food to the world
12
We protected the reputation of New Zealand food exports
13
We promoted cost-effective regulation
14
We worked to minimise compliance costs for business
14
Consumer food practices and choices that support better health
15
We informed and advised consumers about safe food practices
15
We informed consumers about using labels to choose healthy food 17
Organisational health and capability
19
Our people
19
The tools we use to do our work
21
Progress towards the State Service Development Goals
23
Cost effectiveness 24
Establishing costs to industry
24
Getting better service at less cost
24
Cost benefit analysis of NZFSA interventions
25
Gaining a better understanding of our cost drivers
26
Statement of Service Performance and Financial Statements
27
Statement of responsibility
28
Statement of Service Performance
29
Output class: Food safety information and participation
29
Output class: Monitoring and assurance
30
Output class: Policy advice on food safety and suitability
31
Output class: Response to food related emergencies and events
32
Output class: Standards setting
33
Output class: Systems audit and enforcement
34
Non-departmental other expenses:
New Zealand-Australia Joint Food Standards Setting Treaty
35
Financial Statements
36
Audit Report
59
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 1
Minister’s foreword
This is the second year that the New Zealand Food Safety Authority has operated as
a standalone government department and it is therefore of considerable note that
so much has been achieved.
NZFSA’s Annual Report 2008/09 shows an organisation committed to delivering on its important work
of ensuring a safe and suitable food supply for New Zealanders and consumers of New Zealand food
products around the world. It reflects an organisation that continuously looks for ways of improving
the way it works and the way our food industry manages food safety risks. This contributes to New
Zealand’s ability to build on its international reputation as a trusted supplier of safe food.
Hon Kate Wilkinson
Minister for Food Safety
The export sector is crucially important to New Zealand’s economy and future growth. NZFSA plays a
central role in assisting the access of New Zealand food products to overseas markets.
This year has seen additional challenges caused by the global recession. This has affected not just
NZFSA, the New Zealand Government and overseas trading partners, but has placed significant
commercial pressures on NZFSA’s stakeholders in the food industry.
I am therefore pleased to see NZFSA working with industry on several fronts to find non‑regulatory
avenues for managing food safety risks, so compliance costs for business can be kept to a minimum.
At the same time, it is encouraging to see industry embracing the tenet that safe food is good for
business. We are seeing those in the food industry willingly assume greater responsibility for the safety
and suitability of the food they produce or sell.
This fits well with an important focus of the new Food Bill which will place obligations on food
producers, processors, sellers and importers to ensure the safety and suitability of their product.
This report highlights the importance of NZFSA’s other strategic relationships – including local and
overseas scientific and regulatory agencies, and particularly those across the Tasman. Our relationship
with Australia is significant and the food arrangements have led the way in the application of Closer
Economic Relations.
The world is getting smaller, and the potential for food safety risks having global reach is becoming
greater, as we saw with the melamine-tainted milk in China. Its Annual Report 2008/09 confirms NZFSA
is well-placed to respond appropriately and proportionately to those risks so that New Zealand consumers
are protected, and official assurances on the safety of New Zealand food exports are credible.
I am pleased to note the achievements of NZFSA in this annual report and look forward to NZFSA rising
to the challenges of the year ahead.
Hon Kate Wilkinson
Minister for Food Safety
PAGE 2
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Chief Executive’s foreword
This has been a challenging yet rewarding year for NZFSA, as you will discover
in this report.
Many of the challenges we set ourselves and planned for. Others were unforeseen and some, including
the global recession, were shared by stakeholders, consumers, the food industry, Government and
trading partners. In every case, we have strived to meet those challenges, and to deliver the outcomes
required of us. We work hard to protect food safety for consumers. As a direct consequence, we
contribute to retaining and enhancing New Zealand’s access to, and reputation in, our export markets.
We recognise that we cannot achieve this alone. We work closely with other organisations here and
overseas. We have strong and valuable relationships with food safety agencies across the globe and
especially close ties with those of Australia, the European Union, US and UK, Ireland and Canada.
Andrew McKenzie
Chief Executive
Through such relationships we can access up-to-date internationally-accepted science and gather
intelligence on emerging food safety hazards. By working collaboratively we ensure that all New
Zealanders are protected, as are overseas consumers of New Zealand food.
A prime focus for us is ensuring that we continually add value to New Zealand’s food sector while
driving costs down for regulatory compliance and market access. No individual or country will buy food
that is not safe. Yet no one can sell food if the cost is too high. NZFSA strives to ensure food is safe
and that the price of that assurance is fair and reasonable. To support commerce and trade, we are
continuously reassessing and removing regulations that do not contribute to outcomes of food safety.
NZFSA is a strong and effective organisation but we cannot be complacent. The future remains
uncertain. Further unanticipated food safety and market access challenges undoubtedly lie ahead. We
are working to ensure that we can respond quickly and effectively. Our overriding priority is always to
protect consumers, while always remaining conscious of the influence we have on compliance costs for
our food producers, food businesses and food exporters.
New Zealanders can rest assured that the people of NZFSA are committed to ensuring this country’s
food supply is as safe as it can be.
Andrew McKenzie
Chief Executive
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 3
Our performance 2008/09
Improving the safety and suitability of food
New Zealanders want to know that the food they eat is safe and is accurately labelled
with information about its ingredients, nutritional value and shelf life. NZFSA’s role
is to protect the public from hazards in the food supply and ensure that all food
is suitable for its intended use, and meets consumer expectations in labelling and
composition. We make risk management decisions based on sound scientific evidence.
• Campylobacteriosis rates are falling
In 2008/09 we continued our efforts to improve
ahead of target
the safety and suitability of food. Our main aims
The cost to society of the
major foodborne illness in
New Zealand is about $86
were to achieve lower rates of sickness from
In 2009, just two and a half years into the
harmful bacteria in food; safe levels of residues
strategy, NZFSA’s five year goal of a 50%
in food; safer food businesses; suitable food
reduction in campylobacteriosis rates for cases
that meets consumer expectations; and, good
caused by food was exceeded. While we cannot
management of food safety emergencies.
say that this trend will be sustained, the early signs
are encouraging. As poultry is the main source
Less sickness from pathogens
in food
of Campylobacter in New Zealand, NZFSA has
worked closely with the poultry industry to find
NZFSA has risk management strategies targeting
ways of reducing the risk of Campylobacter. In
three of the most important foodborne pathogens
2008/09, as part of our multi-pronged approach
that make New Zealanders sick. Campylobacter is
to tackling the pathogen, we released two
by far the greatest cause of bacterial foodborne
chapters in a code of practice being developed
illness in New Zealand, with 83 cases reported for
in stages to guide good operating practices
every 100,000 New Zealanders in 2008. Listeria
for industry. A further chapter on hygiene and
is much less common, but is the most severe,
sanitation is being released for consultation.
sometimes causing death or disability in vulnerable
Science work is underway on several fronts.
people such as the elderly or in unborn and
Projects include looking at where in the food
unrecorded. The ratio of
newborn babies. Salmonella infections cause the
chain control measures might be most useful and
reported to estimated
third highest financial burden on society of these
investigating sources of Campylobacter other than
illnesses in New Zealand.
broiler chicken. New Zealand, through NZFSA, is
million a year, mostly due
to lost productivity from
days off work
For every officially
reported case of
foodborne illness, there
are many more in the
community that are
cases in the community
for campylobacteriosis is
1:8, and for salmonellosis
Foodborne proportion of campylobacteriosis
1:3. It is estimated
are reported, so the
ratio is 1:1
260.00
Foodborne Proportion (Rate per 100,000 population)
all listeriosis cases
240.00
220.00
200.00
180.00
160.00
140.00
120.00
100.00
80.00
60.00
40.00
2003
2004
2005
2006
2007
2008
2009
Year
PAGE 4
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
2010
2011
2012
co-leading with Sweden the working group of
the international standard-setting body for food
safety (Codex Alimentarius Commission) to control
Campylobacter and Salmonella in chicken meat.
• Our Salmonella strategy was launched
Salmonella bacteria cause the foodborne illness
salmonellosis, striking a reported 16 out of
every 100,000 New Zealanders in 2008. In
April 2009 we launched the Salmonella risk
management strategy, focussing on non-typhoid
Salmonella. The strategy supports NZFSA’s goal
of reducing the annual incidence of foodborne
salmonellosis by 30% within five years. In early
2009 we started working with industry to collate
detailed data, share the insights of those who
have experience of managing Salmonella, and
gain a clear picture of the exposure pathways
to pinpoint where in the food chain efforts to
reduce or stop the disease will be most effective.
• Strategy to control Listeria
monocytogenes in food
Residue levels in food are safe
New Zealand has very safe food. We have strict
standards for home grown and imported food
and New Zealand businesses continue to show a
Imported foods on the
‘high risk’ list may
be tested and sampled
at the border
high rate of compliance with these standards.
• We’re improving how we monitor and
assess risks for imported foods
We are finalising a way of identifying the relative
risks of imported foods so we can better target
those with the highest risk of microbiological
or chemical contamination. To better control
and monitor imported foods we put in place
two standards. One requires all importers to
be registered, the other outlines importers’
responsibilities around importing safe and
suitable food. We also carried out the first round
of surveys for our ongoing annual imported
food monitoring. The results are being published
as part of NZFSA’s monitoring and surveillance
programme.
We are working towards allowing a broader
The incidence of foodborne listeriosis is low – 27
range of raw milk products, such as cheeses, to
cases reported in 2008, a rate of 0.5 per 100,000
be imported, as well as permitting these to be
people – but because it is such a severe illness
manufactured in New Zealand. These foods are
NZFSA has identified Listeria monocytogenes as
not recommended for everyone, but there is a
a high priority. Our goal is to see no increase in
clear demand for them.
reported incidence of foodborne listeriosis after
five years. In 2008/09 we drafted guidance on
steps to control Listeria, which will be sent to
industry for review during the next year.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 5
• Our chemical residue testing continues to
show high compliance
• Our five-yearly check on the New Zealand
diet has started
There are very high levels of compliance with
In 2008/09 we designed and began the 2009
chemical use requirements. Our monitoring
Total Diet Study. Final results are expected in
programmes check for chemical residues and
late-2010. Every five years more than 120 foods,
contaminants in animal and dairy products
commonly eaten as part of an average diet, are
for both the domestic and export markets.
tested over a year to estimate New Zealanders’
Full 2008/09 results are not yet in, but early
exposure to chemical residues, contaminants and
indications are that dairy will again meet 100%
selected nutrients. The results give a snapshot
compliance and meat (including game, ostrich
of what’s in our food and highlight areas where
and emu) and farmed salmon and honey, are
food might be deficient in essential elements (eg,
likely to be about 99.95% compliant. Annually,
iodine) or where there are possible risks from
we randomly take 6,000 samples, looking at
excess exposure. The results also show trends over
200,000 combinations of compounds, for dairy
time and allow New Zealanders’ dietary exposure
and meat. Other programmes test fruit and
to be compared with other countries that also do
vegetables, shellfish, and fin fish. Information
surveys.
from our shellfish monitoring is also used
by public health units to close beaches for
recreational taking of shellfish where there are
• We set maximum levels for tutin in honey
to prevent poisonings
unacceptable biotoxin levels. Plant product
We worked with beekeepers to set a new food
monitoring checks the effectiveness of controls
standard for the natural toxin, tutin, in honey.
placed on the use of agricultural chemicals in
The new standard for extracted and comb honey,
food production. Where we find non-compliance,
for sale in New Zealand and for export, sets
we follow up with investigations and/or audits of
maximum residue levels for tutin in honey and
implicated growers.
outlines several risk management options that
beekeepers must choose from to ensure their
• Pesticide importers, makers, sellers and
users show high compliance
honey is safe. The standard came into force at
the start of 2009 and, now the first harvest with
We regularly do ‘slice of life’ surveys to check that
the standard in place is over, we are inviting
industry sectors that have not previously been
input into its review. We are working with Food
part of a compliance or monitoring programme
Standards Australia New Zealand (FSANZ) to
are complying with the Agricultural Compounds
include part of the standard in the joint Australia
and Veterinary Medicines Act. In 2008/09 a check
New Zealand Food Standards Code, (the Food
of the pesticide industry showed substantial
Code) as this is where the limits for these types of
compliance, giving us confidence that importers,
contaminants are set.
manufacturers, and distributors of agricultural
chemicals understand their obligations and
pesticide users understand their responsibility to
adhere to instructions on product labels.
PAGE 6
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Case study: Teamwork
sets a standard for tutin in honey
Toxic honey is produced when bees gather
involved extracting toxin from the tutu plant
honeydew excreted by vine-hopper insects that
and testing its toxicity compared to related
have fed on the native tutu bush. Although
toxins extracted from a South African plant.
tutin has no ill effects on bees or vine hoppers,
There was more scientific information on the
it is highly toxic to humans – as little as one
South African plant, which is poisonous to
teaspoon (10mls) of toxic honey can affect the
hyenas and jackals.
nervous system and result in death.
The Food (Tutin in Honey) Standard, which was
Historically, beekeepers managed the risk by
drafted by NZFSA’s Legal team, set a maximum
removing hives before the risk period, or by
level of 2mg/ kg of tutin in non-comb honey
monitoring the tutu, vine hopper and foraging
for sale for human consumption or for export,
conditions in a 3km radius around the apiary
and a limit of 0.1mg/kg of tutin in comb honey.
during harvest.
Comb honey is potentially more risky than
These controls were voluntary in the domestic
liquid or creamed honey because toxins can be
sector and compulsory for exports, and
concentrated in small parts of the comb.
appeared to work well, until March 2008 when
The draft standard provided a number of ways
22 people fell ill after eating comb honey from
for beekeepers, packers and exporters to show
Whangamata. Testing of the leftover honey
they were complying with the maximum tutin
found high levels of tutin.
level including demonstrating their area was
After news of the poisonings broke, NZFSA’s
free of tutu bushes, testing product, or showing
Communications Group issued media releases
they had a registered risk management
reminding beekeepers of their responsibilities to
programme.
produce safe food, and provided information to
The Policy Group prepared a discussion paper
the public on the incident.
and provided briefings to the Minister for Food
A survey by NZFSA’s Compliance and
Safety. More risk management options were
Investigation Group found tutin in honey in
added following meetings with beekeepers and
several geographical areas – including some that
submissions from the public during November
had not previously been considered high risk.
2008. These options included checking of tutu
NZFSA’s Standards and Science Groups set
about determining a maximum allowable level
for tutin in honey that would still be safe to eat.
bushes for honeydew and vine hoppers or
removing honey before the end of December to
avoid the risk period.
We had to find out how much tutin a person
The standard came into force on 25 January
needed to consume to cause the first symptoms
2009. The Standards Group developed a guide
of poisoning, and make sure any standard was
to help beekeepers comply. The standard is
low enough to prevent this.
being reviewed following its first season in
This was a major undertaking. Being a natural
force to check it is effective.
toxin, native to New Zealand, there was little
The Whangamata beekeeper who admitted
international science available. We gathered
selling honeycomb that poisoned 22 people
information from the victims and existing
was ordered by the Court to pay more than
studies, and commissioned new research. This
$3000 in reparation to victims.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 7
The voluntary Food
Control Plan scheme
has been adopted by
68 of the 73 territorial
authorities across
New Zealand
By 30 June 2009, 550
food service operators
had voluntarily registered
a Food Control Plan
New Zealand businesses produce
safe food
• Voluntary use of off-the-peg Food Control
NZFSA has been working with industry on two
An integral part of the risk-based system under
major initiatives to improve food safety and
the proposed new food laws is the use of a
encourage better business practices – the proposals
Food Control Plan, which is a step-by-step guide
for a new domestic food regulatory system and the
to help food operators identify and manage
voluntary use of Food Control Plans.
food hazards. It places the onus on operators
Plans adopted by food businesses
to put in place good practices and procedures
• Proposals for new food laws
and adequately train staff to ensure their food
Following the change of government, we
handling is safe at all times, not just when the
compared the status quo with two options for
inspector calls. An off-the-peg Food Control
improving New Zealand’s food laws: making
Plan for food service and catering sectors was
limited changes to the existing law, or revising
developed and released.
a Food Bill that had already been substantially
After we redeveloped
the wine section of our
website, web page
traffic increased 18%
drafted. Our aim is to provide a consistent
regulatory framework to reduce New Zealand’s
winemakers produce safe wine
high rate of foodborne illness, provide greater
In December 2008, the final phase of the Wine
certainty to food businesses about the regulations
Act 2003 came into force, with the registration of
that will apply to them, and reduce their
Wine Standards Management Plans. These are a
compliance costs. The Government has already
set of documents that show how the wine maker
included changes to food laws in its regulatory
will identify, control, manage and eliminate or
reform programme, and was to consider the
minimise hazards or other risks associated with
options contained in the review in August 2009.
wine making.
Case study: Food
Control Plans guarantee better burgers
Burger Wisconsin Napier owner operator Trevor
Larrington had always followed good food
safety practices such as temperature recordings,
cleaning programmes and staff training at his
store, so the new Food Control Plan system
wasn’t a big stretch.
“Food safety is very important to me, so
implementing a Food Control Plan was the
natural next step to take,” he said.
The off-the-peg Food Control Plan provides
a set of procedures and records to help food
operators and caterers best manage food safety
in their businesses. Operators are supplied with
a folder that has sections on management,
the basics, safe cooking and keeping records.
Each section has sheets dealing with typical
situations – each sheet has a goal, followed by
explanations of why it is needed, how it could
be achieved, and what to do if something goes
PAGE 8
• We implemented the Wine Act to ensure
wrong. A separate diary records daily, weekly or
monthly tasks.
“There’s a bit of extra paperwork to start with,
but once we got set up it takes just a few
minutes each day to record all tasks and ensure
we are serving the safest food possible to our
customers,” Trevor said.
Complying with the new Food Control Plan
means Burger Wisconsin Napier is now exempt
from the Food Hygiene Regulations 1974.
Trevor also uses a blue ‘Serious about Food
Safety’ window sticker to show customers
he is taking part in the upgraded food safety
scheme.
“With so many burger outlets now operating in
Napier, being able to guarantee safer food is a
definite advantage.”
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
• We monitored compliance and took action
to ensure safe food
In 2008/09 our Compliance and Investigation Group
(CIG) undertook several high-profile successful
prosecutions. These included an unregulated
Auckland poultry processor that slaughtered
thousands of chickens in what a judge described as
stomach-turning conditions, a Gisborne restaurateur
whose poor food safety practices caused more
than 50 diners to fall ill after eating contaminated
Christmas turkey, and a Whangamata beekeeper
who sold honeycomb that poisoned 22 people.
Working with Australia to improve
the safety and suitability of food
In 2008/09 CIG:
• initiated 1060
investigations
• We are keeping the joint food standards
Treaty up-to-date
New Zealand and Australia share joint food
• closed 690
investigations
• completed 7
standards covering labelling and composition.
prosecutions and
This is underpinned by an international Treaty,
continued with
signed by both Governments in 1995. From time
another 7
to time there is a need to update the Treaty, to
• proceeded with
ensure its continued currency and applicability
6 prosecutions
in a changing environment. During 2008/09
• carried out 2 complex
work on reviewing the Treaty was progressed to
audits (more than 25
Food meets consumer expectations
in labelling and composition
reflect changes made to the FSANZ Act (Australia)
days), 31 moderately
in 2007 and recommendations from a review
complex ( between
One of NZFSA’s key roles is to make sure that
conducted in 2006.
10 and 25 days),
food is not only safe, but that it is suitable for its
intended use. Food ‘suitability’ refers to product
attributes such as aesthetic characteristics or
defects, composition and labelling, that are not
related to food safety. For a food to be deemed
‘suitable’ the label has to accurately reflect
everything in the food product. The product must
have appropriate statements on the label for
pregnant women and people with low immunity
and intolerances. Consumers can tell if a food
is what they want or need (ie, ‘suitable’) if the
label has accurate information about the amount
of a particular ingredient in it, any nutritional
additives (such as vitamins or minerals), and ‘best
before’ dates so it can be eaten before the quality
deteriorates.
• We supported joint food standards
development
and 130 single site
audits (taking less
than 10 days)
NZFSA is active in policy development work that
provides the framework for FSANZ’s standards
development. In 2008/09 New Zealand took the
chair of a working group with responsibility for
developing a policy guideline for infant formula
products. This involves representatives from New
Zealand and all Australian states and territories
and to date has resulted in the publication of a
consultation paper. NZFSA also assisted in the
policy development for a review of front-of-pack
labelling, a food labelling review, special purpose
foods and strategic planning for the joint system.
• We made submissions on standards
• We monitored food labelling compliance
We have been working with FSANZ to establish
baseline data for checking compliance with the
food labelling laws set out in the Food Code.
NZFSA will use data gathered by FSANZ in
2005 and 2006 to compare against data FSANZ
proposes to collect in 2010/11.
developed for the joint system
NZFSA works with FSANZ in the standards
development process and supplements this
with submissions on every standard developed.
In 2008/09, 18 submissions were made on
applications and proposals and 29 briefings
were provided to the Minister for Food Safety to
assist her in making a decision on applications
and proposals. Nineteen of these resulted in
amendments to the Food Code.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 9
Food safety emergencies are well
managed
• Melamine-tainted milk in China had
As New Zealand’s food safety regulator, NZFSA is
Following information from New Zealand dairy
responsible for handling food withdrawals, recalls
company Fonterra, a part owner of the Chinese
and food safety emergencies. Data on food recalls
milk company San Lu, New Zealand alerted the
can be used to identify trends and problems in the
Chinese Government that infant milk formula in
food industry as well as letting food businesses
China had been adulterated with the industrial
know which hazards are most likely.
chemical melamine. The full story is outlined in
worldwide reach
our case study on page 11.
In 2008/09 there were
• We monitored food recalls and withdrawals
30 voluntary withdrawals
A recall is the removal of unsafe food from the
and 17 recalls
distribution chain right through to food already
After mandatory warnings
on labels for food
allergens were introduced
in December 2002, we
saw a big spike in the
number of recalls due to
incorrect or incomplete
allergy warnings. Since
then the numbers have
tracked downwards
again. In 2008 the
number of recalls was
about half those of 2003
food incident response
9 times in 2008/09.
One involved a whole of
government response
accidentally tainted with melamine
sold to consumers, so the public has to be
In February 2009 an imported mineral supplement
advised – usually through media advertisements
called ferric pyrophosphate, used as an iron
or publicity. A withdrawal stops at the point
supplement in food products, was found to be
at which food is sold to consumers – only
accidentally contaminated with the industrial
suppliers and retailers will be involved. If a food
chemical melamine at levels above the threshold
needs to be withdrawn from sale because it is
set in NZFSA’s melamine risk management strategy.
unsafe, unfit to eat, or contaminated, NZFSA
NZFSA investigated, but we found no evidence of
can demand its recall under the law, or the
a food safety risk in the range of final food items
company can initiate its own recall or withdrawal
that contained the ingredient and no one was
and advise us. More and more businesses today
reported sick. We worked with the importer to
understand that safe food is better business.
identify product with the contaminated ingredient
We’re pleased to see that with improved risk
and it was withdrawn. NZFSA advised the European
management processes in place, business are
Union, which was responsible for investigating the
more frequently initiating voluntary recalls rather
initial source of the accidental contamination.
than waiting to be told to by NZFSA.
We activated our formal
• Food ingredient was found to be
• We worked with other agencies here and
overseas to handle emergencies
• Salmonella outbreak was linked to flour
Flour was the source of an outbreak of
Salmonella typhimurium phage type 42 just
Food safety emergencies often require close
before Christmas 2008. The manufacturer
cooperation with other agencies either within
cooperated fully with NZFSA’s investigation,
New Zealand or overseas. We take a cross-
voluntarily withdrawing the suspect product.
(the melamine discovered
government approach to emergency management
It is possible for low levels of bacteria to be on
in infant milk formula in
by making sure we share an understanding of best
wheat or at other points in the flour milling
China), 3 involved at least
practice procedures. This year we shared resources
process, and studies indicate that about 1%
one other agency and 5
with the Ministry of Health in the early response
of flour on average contains Salmonella. This
were handled by NZFSA
stages to the H1N1 influenza pandemic. We agreed
was the first reported human outbreak of
a food incident response protocol with Australian
salmonellosis in humans associated with flour in
food safety agencies to ensure consistency of
New Zealand, and possibly the world. NZFSA put
responses. We continued a memorandum of
out media releases warning people that flour is
understanding with the New South Wales Food
a non-sterile raw ingredient, and should only be
Authority which included aligned emergency
eaten cooked.
alone
response and recall procedures.
PAGE 10
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Case study: Lessons
from melamine-tainted milk in China
The biggest food safety story of 2008/09 was
the melamine-tainted milk in China. At least
six babies died and thousands of other infants
fell sick with kidney problems after consuming
infant formula laced with melamine in an
alleged attempt to boost the apparent protein
content of the milk. Melamine, an industrial
chemical, is not something anyone would
expect to find in milk but it was used to mimic
protein. The milk was then watered down to
increase its volume and hence its value.
to 30 ppm in foods and several countries had
After being notified of the problem by Fonterra,
a part owner of one of the affected Chinese
dairy companies, San Lu, NZFSA quickly tested a
range of potentially-affected products imported
with urgently and firmly, but we also saw that
from China. The results showed that if melamine
was present it was at levels so low as to be
undetectable, and too low to pose any risk.
As the scale and severity of the event continued
to grow in China, we broadened our testing
of other potentially risky food and found
melamine at unacceptable levels in sweets
imported to New Zealand. NZFSA issued
a Director General’s ‘privileged statement’
under the Food Act warning consumers not
to eat these sweets. We alerted the importers
and distributors and the sweets were swiftly
withdrawn from sale. Media helped get the
message across to consumers.
This international event did show that New
Zealand is well-prepared to handle such
incidents. We were able to react quickly and
credibly. Testing was thorough, communication
effectively stopped distribution and consumption
of the suspect products, and consumers were
able to access information on our website
as soon as we got it. This event impacted
significantly on New Zealand exports because
of the Fonterra connection. Our market access
team had to put in many extra hours of work
providing explicit assurances to many markets.
Negotiations are still ongoing with some.
Before this event, little was known about the
effects of melamine on humans. We knew
melamine might leach in trace quantities from
plastics and equipment during processing and
packaging. The European Union allowed up
similar allowances. But, the science was sketchy
about the effects on consumers from eating the
high levels found.
Eliminating melamine from our food completely
was not possible and, as it did not cause harm
at very low levels, imposing a requirement for
zero presence was not necessary. But NZFSA
needed to define what was to be a ‘trigger
level’ for investigation and action. Incidents
of adulterated food would always be dealt
melamine could be present at very low levels
and do no harm.
So, we worked with other food safety
authorities and the World Health Organization
to determine appropriate levels for investigation
and action.
The European Food Safety Authority
reconsidered its opinion on the estimated
daily intake of melamine people could safely
consume. It confirmed that for every kilogram
a person weighs, they can safely consume up
to 0.5 milligrams of melamine every day. This
means a 20 kilogram child can safely consume
10 mg of melamine every day of their life and
suffer no ill effects. For a 70 kilogram adult, the
safe amount is 35 mg of melamine a day. This
calculation includes a very wide safety margin.
Based on this figure, NZFSA adopted a melamine
risk management strategy. We set a conservative
investigation threshold of 2.5 mg per kilogram
for most foods. We believe infant formula to
pose a greater risk and so set the threshold at 1
mg/kg – the routine level of detection at which
we can be confident of results.
Decision-making in the absence of complete
information or knowledge is not uncommon
for food safety authorities and we always take
a conservative approach, but it was clear that
applying a zero tolerance would have been
scientifically unsustainable and would have
resulted in huge costs and a waste of safe food.
The strategy we adopted provided a sensible
compromise.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 11
Improved business opportunities through safe
and suitable food
The food sector is vital to the New Zealand economy, contributing around 23% of
our gross domestic product and employing one in five workers. About 80% of food
produced in New Zealand is exported, and we export to some of the world’s most
demanding markets. Our role is to ensure that all food produced in New Zealand is
safe and that assurances we give around the safety of our food can be trusted by
our trading partners.
We helped New Zealand export
food to the world
Our market access team plays an important
role in New Zealand’s ability to export $18
Our animal products
E-cert system processed
more than 14 million
database transactions in
2008/09
The animal products
E-cert system is accessed
billion worth of agricultural and seafood
products annually. Every year we issue more
than 120,000 export certificates. We provide
more than 100 countries with government-togovernment assurances that the animal, dairy,
plant and seafood products they receive from
New Zealand’s producers comply with agreed
standards.
documentation
negotiate the acceptance of New Zealand export
standards by our trading partners as equivalent
to their own standards.
• Our E-cert standard simplified export
certification
We made substantial progress in simplifying
and harmonising export certificates. Ten out of
13 countries that previously required multiple
certificates for dairy exports have now agreed to
accept a single certificate in an E-cert format. We
started electronic transfer of certificate data to
more than 1000 times a
day for help with export
seafood and plant sectors. We continued to
• Our market access programme continued
the United States and have conducted trials with
the European Union. The case study below gives
to lead the way
Our market access programme continues to drive
more information about our E-cert success story.
the day to day operations of the market access
team. During the year we agreed and started
work on strategic priorities with the meat, dairy,
Case study: NZFSA
PAGE 12
E-cert standard goes global
NZFSA has led the world in electronic data
and messaging for trade of food, with the
development of electronic certification –
a paperless system to clear goods at the border.
governments to detect counterfeit certificates
or illegal shipments.
In March 2009, the United Nations Centre
for Trade Facilitation and Electronic Business
released an international E-cert standard to
be used for the electronic certification of
agricultural products. The standard is built on
work undertaken by NZFSA and the Australian
Quarantine and Inspection Service.
economy. NZFSA has been using E-cert since
The direct electronic exchange of information
makes it difficult for traders to use forged
documents to clear goods, and easier for
significantly reduce the cost of paperwork and
The adoption of the standard was a major
coup for NZFSA, industry and the New Zealand
1998 and it has been a powerful tool in
facilitating trade, and providing governmentto-government assurances that food exported
from New Zealand is safe.
As more countries adopt this tool it will
certification for New Zealand food exporters.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
• Bilateral negotiations helped to grow NZ
food exports
We protected the reputation of
New Zealand food exports
During the year, we invested significant time
The melamine incident in China (see the case
progressing the signing of Memoranda of
study on page 11) had a significant impact on
Understanding and equivalence agreements
New Zealand food exports and our market access
with agencies in a number of countries including
team worked hard to provide explicit assurances
the United States, Canada, China and Australia.
to many markets. Negotiations are ongoing and
If our negotiations are successful, this will
we continue to be involved in the resolution of a
significantly minimise barriers to trade.
number of foreign border issues.
Following our assessment of systems in Australia,
and the fact that there are a number of foods
subject to the joint food system, we reduced the
current list of ‘high risk’ foods requiring routine
inspection when imported from Australia, to
seven foods. Australia is committed to
establishing a similar protocol for some New
Zealand products exported to Australia.
• We influenced international standards
New Zealand has been at the forefront of Codex
work on international standards for controlling
and monitoring veterinary drug residues in food,
and applying risk analysis principles to nutrition.
NZFSA has had a substantial role in developing
both these standards, which were adopted by
Codex following its June 2009 meeting.
Discussions held with non-European Union
(EU) members Switzerland and Norway in
June, to align sanitary and phytosanitary (SPS)
• Government assurances underpinned
growing confidence in NZ wines
arrangements with those we already have in
Wine export certification assures our export
place with the EU, are also expected to boost
markets that exported New Zealand wine is a
trade.
quality product that can be traced back to the
grape variety, vintage, region, and winemaker. It
• We supported NZ’s free trade negotiations
also provides assurances that the wine meets any
The completion of free trade negotiations with
extra requirements for importing countries. We
Australia and the 10 countries of the Association
initiated a review of the wine export certification
of South East Asian Nations (ASEAN) gives us
process to ensure certification keeps pace with
further access to a combined market of more than
New Zealand’s rapidly expanding and increasingly
560 million people and GDP of US$737 billion.
complex wine exports. Our intent is to develop
We supported the Ministry of Foreign Affairs and
a new electronic platform for the management
Trade (MFAT) in these negotiations by providing
and certification of wine exports. We also put
Our overseas market
technical expertise on the parts of the agreements
in place a new programme to allow any eligible
access requirements
that impact on food safety.
laboratory in the country to apply to carry out
(OMAR) web pages
testing of wine for export to Europe. clocked up 167,710
We continued to support MFAT’s free trade
negotiations with the Gulf Cooperation Council,
page views in the year
• We improved dairy export assurances
from industry members
We introduced a new standard to align export
exporting (non-dairy)
verification in the dairy industry with that in
animal products; up
other animal product sectors. This came into
about 15% on the year
We concluded SPS chapters, which set out
force on 1 July 2009, and will give us a more
before. This shows the
the rules on food safety and animal and plant
robust basis for issuing official assurances to
value of having export
health standards for the proposed free trade
overseas markets. These assurances keep down
market requirements
agreements (FTAs) with Malaysia. We have
the cost to industry of having to prove their
readily available on the
started putting in place arrangements agreed in
products meet the regulatory requirements of the
website
the earlier FTAs with China, Thailand, and Chile.
importing country.
Hong Kong, Korea and India and hosted
delegations from Japan, China, the European
Union and Australia.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 13
We promoted cost-effective
regulation
We worked to minimise compliance
costs for business
We continue to look for innovative ways to
Minimising compliance costs and making it easier
deliver more cost-effective regulation. This
for businesses to participate in our regulatory
involves taking into account the compliance
programmes is paramount in helping businesses
costs for business and potential benefits for
achieve sustainable economic growth.
the New Zealand economy through increased
food exports.
of regulatory changes
• New tool was proposed for assigning
We continued working with the Ministry of
priority to market access requests
Economic Development (MED) on a trial of a
During the year we worked on a prototype of a
Business Cost Calculator. This new tool will help
tool to provide a framework for the assessment
us assess what impact regulatory decisions have
of market access requests. The return on
on business costs. NZFSA staff have received
investment model aims to provide a consistent
initial training and have assisted MED with pre-
and transparent process for the prioritisation
trial testing. MED planned to roll out the Business
of requests, taking into account criteria such as
Cost Calculator in 2009/10.
the strategic fit with ‘NZ Inc’ objectives, industry
Food Control Plans
• We trialled a new tool to measure impact
commitment, and the value likely to be accrued
• We simplified food safety for food
businesses
are now available in
to New Zealand. The prototype aims to allow
5 languages: English,
comparisons between large projects and small
NZFSA has developed off-the-peg Food Control
Chinese, Korean,
projects, taking into account the relative costs
Plans (FCP) that give operators of participating
and benefits derived. Prioritised projects will then
food service and catering businesses a free, ready-
be allocated resources accordingly.
made set of procedures and records to help them
Vietnamese and Hindi
NZFSA intends to consult with industry about the
tool later in 2009, with a view to implementing it
in early 2010.
• Verification Agency cost effectiveness
study started
We initiated a cost-effectiveness review of
NZFSA’s Verification Agency (VA), the part of
our business that checks that meat, seafood
and other animal products meet both New
Zealand standards and any additional standards
of importing countries. We want to identify
the value derived from VA’s activities, including
economic returns to the export sector. Terms of
reference were developed and we appointed
external consultants to undertake this work. The
review is expected to be largely complete in the
first half of the 2009/10 financial year.
identify then manage food safety risks.
• Horticulture exporters benefited from
new database
We introduced a new pesticide residue limit
database to make it easier for New Zealand
fruit and vegetable growers to comply with
international trade requirements. The database is
a key resource for exporters and growers wishing
to gain access to international markets. It provides
information on pesticide maximum residue limits
that have been established by our major trading
partners to safeguard consumer health.
• We helped small food producers enter the
export market
During the year we worked with New Zealand
Trade and Enterprise on a number of initiatives
to help small food producers get to export. We
aim to ensure small food producers looking to
export food have realistic expectations of what
is expected of them. In support of this, we
improved export information on our website for
animal and dairy products and wine.
PAGE 14
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Consumer food practices and choices
that support better health
Good consumer food practices and choices are crucial to achieving food safety
and better health. NZFSA’s role is to provide authoritative and science-based food
information that supports safe food handling practices across the community and
allows consumers to make appropriate food choices that support better health.
We informed and advised
consumers about safe food practices
• We worked with others to achieve
New Zealanders’ knowledge and use of safe food
We recognise that there are other organisations
practices is variable. Foodborne disease arises
that have similar goals to NZFSA, in terms of
in domestic settings through practices such as
reducing foodborne illness and encouraging
poor hand and kitchen hygiene as well as food
safe and suitable food choices. Some of our
storage, preparation and cooking. The risks are
strategic partners that we have worked with
consumer line queries
higher for people with low immunity.
in 2008/09 are:
and 4877 email
our goals
NZFSA has set an objective of helping more
The New Zealand Foodsafe Partnership
than 80% of consumers be confident in their
A group including NZFSA, public health units,
knowledge of hygiene and food safety in the
industry, and representatives from consumer
home. The next survey to measure this is planned
and food sector organisations that provides
for 2011.
clear, consistent advice on how people
NZFSA identifies audiences with specific food
safety needs and uses various channels to reach
them, including targeted publications, the
internet, consumer shows and media releases.
• We targeted improved food safety at
home
can keep themselves and others safe from
foodborne illness. The Partnership’s two
mascots, Foodsafe Freddie and his cousin
Feleti, featured on television and at public
events throughout the year.
In 2008/09 we:
• issued 49 media
releases
• answered 418 media
queries
• responded to 3706
questions
• wrote or updated
fact sheets on
Listeria, canned
food, Salmonella,
nitrates and nitrites,
endosulfan, MSG,
aspartame, intense
food sweeteners and
mercury in fish
• had 320,263 visits to
The Chip Group A group of companies that
our consumer website
works with the Heart Foundation to improve
up from 274,706 visits
New Zealand’s rate of foodborne illness, caused
the standard of hot chips in New Zealand.
the previous year, and
by eating unsafe food, is unacceptably high
NZFSA is supporting efforts to improve the
• our summer television
with the most recent NZFSA study putting
suitability of the edible oil used in the food
advertising reached
the economic cost, mostly through lost work
service sector. We provided technical and
an estimated 2.4
days, at about $86 million. It is thought a large
communications expertise to the Groups’
million New Zealanders
proportion of the problem could be caused by
work this year, including assistance with
(18+). The mid-
poor food handling in the home. To address this,
the development of industry standards for
year maintenance
NZFSA this year produced a new guide, Food
cooking healthier chips.
advertising reached 1.9
Safety in the Home.
Consumer NZ A mutually beneficial
The free booklet covers all common aspects of
arrangement whereby NZFSA provides input
home food safety and aims to make all readers
into Consumer articles on food issues, and
more confident in their knowledge of hygiene
Consumer NZ participates in NZFSA consumer
and food safety. It is proving a popular resource
reference groups and provides independent
­– NZFSA distributed about 20,000 copies in the
input into the FSANZ standards development
two months after it was launched in May 2009.
process.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
million people (18+)
PAGE 15
Consumer shows are
an effective way for
NZFSA to get our
• Wild Food Safety DVD clips now feature
on YouTube
• Schools lined up for our mobile food
safety crime scene
Our Wild Food Safety DVD was posted
Since it was launched in March 2009, NZFSA’s
on YouTube. The DVD which incorporates
new ‘Foodborne Illness (FBI) Case File’ display
information from NZFSA’s two wild food safety
stand has been used in 20 schools to teach
communicate directly
books, Food Safety for Recreational Hunters
students about the importance of food safety
with the person who
and Food Safety for Seafood Gatherers, is also
in the home. The stands are rotated between
downloadable from the NZFSA website.
schools for a two week period.
food safety messages
to consumers and
does the buying, storing,
preparing and cooking
of food at home. NZFSA
attended five shows this
Case study: We
provided information for food safety on the marae
year, and had a range
of communications,
technical experts, and
scientists on hand to
answer consumer queries
A kitchen and dining room rebuilding project
went hand in hand with a revamp of food
practices for one Taitokerau marae.
Motatau Marae, located 50km north of
Whangarei, was one of the first two marae to
trial NZFSA’s new food safety guide after its
launch in April 2009. The marae is the cultural
centre of Ngati Te Tarawa, a hapu of the Ngati
Hine Iwi.
Written in Maori and English, Te Kai Manawa
Ora aims to help marae cooks and their helpers
by providing them with tips for keeping food
safe. It is a follow up to NZFSA’s Hangi guide,
which was released in 2004.
Motatau Marae Trustees chairman Pita Tipene
says having spent a lot of money on a new
kitchen and dining room; it made sense to
review the marae’s food safety practices.
“Our strategic plan points to having a
commercial kitchen that complies with all health
and safety requirements, so the food safety
guide dovetailed nicely with our kaupapa.”
Te Kai Manawa Ora contains food safety
information on traditional Maori food practices
including hangi and gathering kaimoana,
watercress and puha.
It also includes templates on maintenance
and cleaning schedules, which marae kitchen
workers can use to document their food safety
practices to help keep their whanau and guests
free from foodborne illness.
Marae Trustees secretary Rowena Tana, who is
also one of the marae’s main cooks, was not
aware of anybody falling sick as a result of the
marae’s old food preparation ways “but I’d say
a few of our practices were borderline”.
A dedicated group of the whanau used
the guide to identify food safety risks, and
take action. For example, to avoid crosscontamination of food, they installed a second
chiller to keep fresh meat separate from fruit
and vegetables. Kitchen practices have also had
a shake up. Whereas whanau used to enter
the kitchen and hariru (shake hands with) the
cooks, they must now wash their hands before
doing so.
“One of the food safety risks with different
hui is that all types of people come in to the
kitchen to help and you don’t want to turn
them away,” Rowena said.
“So we have to be aware of their presence,
and make them aware of our food safety
requirements.”
Pita said the guide was simple, clear and easy
to follow. “It makes you think about your food
safety practices. Just because you’ve done things
a certain way for the past 100 years, it doesn’t
mean it’s the best or safest way to do it.”
“Every marae wants to manaaki (care for) its
manuhiri (visitors) and there is no way we want
to put them at risk through food poisoning.”
PAGE 16
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
The mobile stands replicate a ‘crime scene’ and
can be set up in a classroom or library so students
• We gave practical advice to vulnerable
consumers
Food Safety in Pregnancy
continues to be our most
can solve the food safety crimes with the help
There are groups of people in New Zealand who
popular publication. This
of clues in the FBI Case File booklet. The clues
are more likely to be affected by foodborne
year we updated and
revolve around hand hygiene and the 4Cs of food
illness. These include pregnant women, infants,
reprinted it. Through
safety (clean, cook, cover, chill). The resource is so
the immune deficient and the frail elderly. NZFSA
distribution in the free
popular that NZFSA is now developing a poster
identifies audiences with specific food safety
Bounty pregnancy
format that can be permanently used at schools.
needs and provides them with information so
pack, it reached 62,000
they can consume food safely. This includes
expectant mothers –
booklets such as Food Safety when you have Low
or 97% of pregnant
Immunity, Food Safety in Pregnancy, and Eating
women in New Zealand.
Safely when you have Food Allergies.
It was also distributed by
• We used science-based advice to
communicate our messages
New Zealanders are increasingly concerned about
the food they eat, but often take messages from
doctors, midwives and
This can be a problem because people may avoid
We informed consumers about using
labels to choose healthy food
safe foods because they’ve been told they are bad
NZFSA works hard to make sure New Zealanders
for them or carry risks.
have the information they need to make healthy
NZFSA seeks to communicate our science-
food choices. The Food Code and the New
based advice directly to consumers through
Zealand Dietary Supplements Regulations allow
media releases, our help-line, web-based tools
vitamins and minerals to be added to some foods,
Our aim is that 70% of
and public events. We create easy-to-read
as well as dietary supplements, in safe amounts
consumers will become
fact sheets and articles based on research
and with specific labelling requirements. This
confident in using labels
NZFSA commissions on risks associated with
helps New Zealand consumers make informed
to help them make
consumer hygiene practices. Our core scientists
choices.
informed food choices.
sources that are not based on scientific research.
and technical experts frequently comment to
the media on food safety issues, providing
an appropriately-pitched science context for
public health units
The next survey to
• NZFSA and FSANZ paved the way for
mandatory fortification
measure this is planned
for 2011
The results of our Total Diet Survey (2003/04)
consumers.
showed that the estimated iodine intake of
• Our science-based advice stood up to
international scrutiny
New Zealanders is at best only 57% of the
recommended dietary intake. During the period
The findings of an international literature review
2005–2007, NZFSA worked closely with FSANZ
of the science around the safety of A1 milk
in the development of a mandatory iodine
by the European Food Safety Authority (EFSA)
fortification standard for the Food Code. The
were released in February 2009. EFSA found no
standard, which comes into force in September
evidence to suggest a link between a range of
2009, requires bread manufacturers to replace
serious non-communicable diseases in humans
salt with iodised salt in bread (excluding organic
and a specific protein fragment found in A1 milk,
and non-yeast bread).
which is the predominant type of milk produced
During the 18 month implementation period,
by dairy herds globally, but not in A2 milk. On
NZFSA has worked with industry to identify any
the basis of its review, EFSA concluded there was
potential issues and develop implementation
no need to carry out a formal risk assessment.
tools. We have also been working with the
As a result of EFSA’s findings, the Government
Ministry of Health to establish baseline data and
has rescinded an earlier Cabinet decision to bring
a monitoring programme that will establish if we
together a group of experts to discuss the need
improve both iodine levels in food and the health
for further research.
status of New Zealanders.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 17
NZFSA received 312
enquiries to our 0800
phone number and
emailed queries related to
labelling
Work was also done during the year on the
implementation of a mandatory folic acid
• We helped consumers choose foods that
are suitable for their needs
fortification standard. The Government has
NZFSA contracts the Auckland District Health
since deferred the commencement date of the
Board to manage the online Manufactured Food
standard until 31 May 2012.
Database (www.mfd.co.nz). The database lists
• Consumer research showed support for
front-of-pack labelling
manufactured foods available in New Zealand
that are suitable for people with some common
food allergies or intolerances, for example egg
Nutrition information panels have been
allergy, or coeliac disease. About 5,000 foods
mandatory on packaged food products since
are listed. The database has been compiled from
2002. However, although the panels on the
information voluntarily supplied by New Zealand
back of packages are intended to assist people
food manufacturers and is updated annually.
make healthier food choices, consumer research
suggests they are not well understood, and
are rarely used by some population groups.
Some public health and consumer groups have
suggested that front-of-pack nutrition labelling
would assist consumers choose healthier
foods by providing quick, simple and easy to
In conjunction with the database, NZFSA
produces three booklets, Understanding Food
Labels, Eating Safely when you have Food
Allergies and Identifying Food Additives, to help
consumers understand what is in the foods they
eat and how to use labels.
understand nutrition information.
We commissioned research this year to
determine the potential benefits of using frontof-pack labels in New Zealand. Phase 1 of the
study involved a literature review and focus
group research. Results from the focus groups
indicated the most understandable label format
was simple ‘traffic light’ front-of-pack labelling.
Subsequent consultation with stakeholders has
highlighted difficulties and costs associated with
implementation of such a scheme. We will work
further with the food industry to determine the
feasibility of running supermarket-based labelling
interventions.
• Proposed dietary supplements standard is
to be considered by Minister
Following extensive consultation on the proposal
to separate therapeutic and food-type dietary
supplements, a draft standard was developed
to regulate food-type dietary supplements. The
standard will make clear the distinction between
food and therapeutic products. Submissions
received on the proposed standard were
extremely positive. We expect to submit the
proposed supplemented food standard to the
Minister for Food Safety for her consideration in
late 2009.
PAGE 18
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Organisational health and capability
Our people
We have completed a draft learning and
We have put in place the People Capability
Strategy 2008–10 to ensure we have people
with the right skills, abilities and commitment
to deliver on the service delivery and strategic
outcomes for government and stakeholders. The
strategy has several threads, and we have made
significant progress on these over the last year.
development framework and work has started
on an employee database to help identify
employees with high potential for management
positions in the future.
• We improved opportunities for all staff
In February 2009 NZFSA become a member of
the EEO Trust. The Trust has provided us with
resources to help develop equity and diversity in
Our staff turnover rate is
NZFSA and the development of an equity and
around 6%, one of the
diversity policy.
lowest in the NZ public
out to attract and retain competent, talented
By integrating EEO into NZFSA, we are able to
service
people, in the right numbers. Part of this is
demonstrate that NZFSA recognises and values
working on the NZFSA Career Brand and
difference and allows staff to bring benefits
identifying what motivates potential employees
to NZFSA’s work through their diverse skills,
to come and work for NZFSA.
perspectives and experiences. The policy also
• We worked to attract and retain talented
people
A substantial amount of work has been carried
This work has been integrated into broader work
being carried out by our communications team
on NZFSA’s internal brand. The NZFSA website
has been updated accordingly.
• We invested in our people
The learning and development of our staff is
an important aspect of our people capability
strategy. The nature of our work means that
we value our staff expertise. Some of our staff
are national, if not international, experts in
their field. We employ around 195 qualified
allows NZFSA to make better decisions and
develop more effective work practices, having
considered a more diverse range of ideas.
• We reviewed pay and employment equity
NZFSA reviewed pay and employment equity
in 2008, in conjunction with the Public Service
Association (PSA). The National Union of Public
Employees (NUPE) and the Engineering, Printing
and Manufacturing Union (EPMU) opted to be
kept informed throughout the review and to be
consulted at key stages.
veterinarians to work at animal products
The key findings of the review were broadly
processing sites and to work in our business
consistent with those of other government
units providing technical advice. Recruiting and
departments that had previously carried out
retaining a highly skilled and highly qualified
reviews, including:
workforce has unique challenges.
•
male and female staff, in our case 15%
NZFSA has developed a competency framework
identifying the core organisational, people
•
and leadership management competencies.
Role-specific competencies are also being
a pay gap between the average salaries of
a pay gap between the average starting
salaries of male and female staff, again 15%
•
female staff were not well represented in,
developed as part of ensuring that all staff have
and were not progressing into the first level
an up-to-date position description and current
of management positions at the same rate
performance agreement and development plan.
as male staff. Female staff were, however,
well represented in senior management.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 19
One of the requirements of the review was
NZFSA jobs to ensure they are gender neutral,
to produce a response plan to address some
and investigating a pay gap for the female-
of the issues identified through the review.
dominated administration/coordinator group.
Initiatives and a timeline to address these issues
The latter found that, following the 2008 salary
were included in the NZFSA People Capability
reviews, the administration/coordinator group
Strategy. We completed two of these initiatives
pay gap no longer existed.
– conducting a benchmarking exercise to review
We have a lower
Gender of NZFSA employees
proportion of female
employees than the
Male 290
50%
core New Zealand
Female 285
50%
public service:
50% against 59%
Almost 62% of our
Verification Agency
employees are male
Age spread for NZFSA employees 2008/09
80
The average age of
70
NZFSA employees is 46
60
The average age of
the general working
population in NZ is 41
50
40
30
20
The average age of the
10
NZ public service is 43
0
20-25 25-30 30-35 35-40 40-45 45-50 50-55 55-60 60-65 65-70 70-75
Ethnicity of NZFSA employees 2008/09
1%
3%
2%
8%
1%
2%
4%
60%
10%
1%
1%
7%
PAGE 20
American
Australian
Asian
British
German
Indian
Maori
NZ European
Other
Pacific Islander
South African
Unknown
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
The tools we use to do our work
• We completed Memoranda of
Understanding
NZFSA has completed Memoranda of
Understanding with a range of New Zealand
government agencies and is negotiating
agreements and arrangements with other
domestic and international agencies. NZFSA
also has partnership agreements with some
industry bodies. These ensure clarity of
intersecting interests and underpin collaboration
in many operational areas.
• We reviewed our risk management
framework
During 2008/09 we
completed international
NZFSA takes a risk-based approach to food safety
arrangements with Health
that allows us to identify, evaluate and manage
Canada, the Australian
risks in food in a systematic way. The 4-step
Quarantine Inspection
process we use to do this is called the NZFSA
Service, the UK Food
risk management framework (RMF). It allows us
Standards Agency and
to 1) identify and evaluate the risk 2) assess the
the Food Safety Authority
risk management options 3) act on the preferred
of Ireland
risk management decision then 4) monitor and
review its effectiveness. We apply the framework
to all food safety issues. This is important because
NZFSA must be consistent and transparent in its
We addressed or are
management of food safety.
addressing many of the
An independent international review of our risk
Slorach recommendations
• Ministry of Health
management framework, completed towards the
through:
• MAF Biosecurity
end of the previous financial year by Dr Stuart
• our progress with
During 2008/09, we completed domestic
MoUs with:
• Commerce Commission
• Ministry of Consumer Affairs
• Ministry of Economic Development
• Other domestic MoUs under negotiation
and due to be finalised in 2009 include
Environmental Risk Management Agency,
Customs and Police.
• The NZFSA Academy provided outside
scientific expertise
Slorach, found NZFSA’s approach to ensuring
the Campylobacter
food safety for consumers is aligned with
strategy
international best practice.
Dr Slorach made recommendations for further
improvements and in 2008/09 we continued to
put in place many of those recommendations.
We are rewriting the RMF to provide greater
clarity and detail on aspects of the framework;
we adopted a revised mandate that makes it clear
that our primary role is to protect consumers; and
we have written a lay summary of our RMF which
From time to time NZFSA uses the advice of
is available on NZFSA’s website.
experts in areas where we either have no staff
expertise or where it is appropriate to seek
independent advice. Occasionally we also need
• Technology continued to be an
• collaboration with the
Ministry of Health on
nutrition
• continued work on
the domestic food
regulatory regime
• new information
collected by the 2009
Total Diet Study, and
• risk communications
around raw milk
cheeses
important tool
to establish expert groups or seek specific
Using technology and facilitating the use of
assistance on particular issues. To help us do this
technology by our clients is an important part
Website visits (excluding
we have the NZFSA Academy. It brings together
of our work during 2008/09. Because many
internal users) rose by
experts on topics as diverse as public health,
farmers, wine makers and other food producers
more than 14% from
food technology, human nutrition, microbiology,
are in remote locations it is important that they
2007/08 to over 1 million
veterinary science, biotechnology, toxicology
can access the advice they need via the internet
in 2008/09
and epidemiology. The NZFSA Academy met
or the telephone.
twice in 2008/09.
Visits to the consumer
In line with the global trend towards online
section of the website
media, New Zealanders are becoming more web
rose more than 16%
savvy and are choosing online channels to source
from 2007/08 to
the information they need. NZFSA is responding
320,263
by continuing to update the website content and
‘look and feel’ to ensure information is up-todate and easy to find.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 21
• We delivered our services in a
sustainable way
Travel NZFSA’s travel policy was reviewed in
2008/09. We put in place new procedures
NZSA has continued to deliver its services in a
and guidelines to ensure that before travel
sustainable way throughout 2008/09. We have
is planned, steps are taken to confirm the
done this with marginal additional cost. Some
trip is required and the business cannot be
specific initiatives include:
conducted over the phone or another way.
Recycling Although we have not conducted
a second waste audit, we have continued to
We are also investigating in-house video
conferencing.
achieve success with our recycling strategy.
Cleaning products Our cleaners use
The Verification Agency office in Christchurch
sustainable products, within the price of the
has successfully joined the programme. The
contract. As part of our recycling programme,
programme is now running in Wellington,
each floor of our headquarters has a ‘floor
Auckland (two offices) and Christchurch.
champion’ to encourage recycling and
Vehicle NZFSA has renewed its vehicle
fleet in line with Ministry of Economic
reduction and to let new staff know about
the programme.
Development criteria for best practice.
Energy use During 2008/09 we continued
to implement the recommendations of
the energy audit. We have replaced light
bulbs with more energy efficient bulbs and
encouraged staff to turn off lights in un-used
rooms and turn off computers when not
in use.
PAGE 22
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Progress towards the State Service Development Goals
Development goals
By June 2010
Goal 1: Employer of choice
Ensure the state
The state services is
service is an
increasingly recognised
employer of choice,
as a professionally
attractive to high
rewarding and desirable
achievers with a
place to work where
commitment to
high performing state
service
servants are committed
to achieving results.
Goal 2: Networked state servants
Use technology
Government-shared
to transform the
infrastructure is used
provision of services
to deliver user-centred
for New Zealanders. services and support
joint results.
NZFSA’s 2008/09 position
A substantial amount of work has been conducted on NZFSA’s career brand.
This work has now been integrated into broader branding work carried out by
NZFSA’s communications team.
Our good result from the Gallup engagement survey, conducted over the
months of September and October 2008, showed that we are well-placed to
retain staff. Our leadership and competency, performance management, and
learning and development frameworks have been further developed.
We have continued to develop our website content and functionality.
NZFSA has made positive contributions through participation in the Joint Border
Management System Steering Committee and Trade Single Window reference
group.
We have agreed a Memorandum of Understanding with the State Services
Commission to participate in the Government Login Service.
Our electronic certification and Verification Agency online systems allow for
user-centred service and easy access to client information.
Goal 3: Value-for-money state services
Use resources
Agencies demonstrate
and powers in an
continued gains in the
efficient, appropriate efficient and effective
and effective way.
use of their resources
and powers, consistent
with government
priorities.
Goal 4: Coordinated state services
Ensure the total
Agencies work together
contribution
towards jointly-defined
of government
outcomes in response
agencies is greater
to government priorities
than the sum of the
and increasingly achieve
parts.
measurable results by
sharing capabilities
and using effective
networks.
Goal 5: Accessible state services
Enhance access,
New Zealanders say
responsiveness
agencies are increasingly
and effectiveness,
working with them
and improve
to design and deliver
New Zealanders’
services to meet their
experiences of state
diverse needs.
services.
Over the last year we have considered the efficiency of our shared services
agreement for the provision of IT services. As a result we have worked with
MAF to instigate a costs and services review which is intended to obtain
improved value or reduce costs.
We were successful in having the Food Act review added to the Government
Regulatory Reform Programme.
NZFSA has completed Memoranda of Understanding with a range of New
Zealand government agencies and is negotiating agreements with other
domestic and international agencies. NZFSA also has partnership agreements
with some industry bodies.
We have contributed positively to the Border Sector shared outcomes work and
will investigate formalising shared outcomes with other government agencies in
2009/10.
We have a shared services agreement with MAF for information management,
human resources and finance.
Food Control Plans for the primary food retailing activity (Food Service General)
are provided free and are available in five different languages.
Our Approvals Group promulgate service delivery expectations to industry and
are looking at ways to deliver other efficiencies.
We have a programme of regulatory reform, and as part of this we work to
reduce compliance costs.
The Verification Agency online system has been implemented, which allows
animal products premises direct access to their records within the system.
Goal 6: Trusted state services
Strengthen trust in
Agencies have in place
the state services
the elements essential to
and reinforce the
support state servants’
spirit of service.
trustworthy behaviour.
We subjected our risk management decision-making process to an independent
review (by Dr Slorach) and have undertaken to implement a tranche of
recommended changes as a result.
NZFSA staff receive training in the Code of Conduct as part of their induction
training and sign to confirm understanding of this and the computer use and
conflict of interest policy.
The integrity of our regulatory practices has been upheld by the Regulations
Review Committee in their formal review process.
The independent Risk and Audit Committee meets quarterly and reviews
NZFSA’s operations and performance.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 23
Cost effectiveness
Throughout 2008/09 NZFSA has been working to improve our understanding of the
costs versus the benefits of our interventions and the ways we can reduce costs to
the Crown and to industry and deliver more value for the same or less money.
There is still more to do and we have signalled
in our 2009–12 Statement of Intent that we will
make this a focus in future years. To this end
we have begun training NZFSA staff to use the
Ministry of Economic Development tool, the
Business Cost Calculator. We are also developing
a return on investment tool, which will allow us
Getting better service at less cost
• The cost of clearing imports in Auckland
Imports of foods on the prescribed (higher risk)
list were previously cleared by the Auckland
Central Clearing House managed by the Auckland
Regional Public Health Service.
The volume of food
to prioritise market access assistance requests
NZFSA has taken these services in-house from
imports into New
and quantify the benefits gained through our
1 July 2009 and will be able to achieve three
interventions in this area.
efficiencies:
Other specific activities and initiatives
•
Zealand is growing
by approximately 6%
each year
compliance with regulations
include:
Establishing costs to industry
• We put in place annual cost recovery
consultation
We have put in place a robust annual cost
recovery review process, to help us meet Cabinet
requirements before approval can be given for
a more consistent national approach to
•
reducing the cost to the Crown by an
estimated $130,000 per annum, and
•
achieving some economies of scale, especially
for larger importers, that will result in
significantly lower costs for obtaining a permit.
• The cost of investigating food complaints
proposed amendments to fees and charges
For 2009/10, NZFSA has brought in-house the
regulations. This process involves substantial
operational food enforcement services previously
stakeholder consultation and provides certainty to
contracted externally. These services relate to the
industry as to the costs they will incur for verifying
investigation and resolution of food complaints in
the safety of their food and food production
two regions within New Zealand. NZFSA estimates
methods.
the changes will save about 20% in the first year.
Public health officers
investigated more than
1200 food complaints
throughout NZ in
2008/09
• We are reducing the cost to industry of
processing approvals
NZFSA has recently brought in-house the
processing of Food Safety Programme
applications. This has removed the duplicative
Cost of service 2008/09
Average number of
complaints
2008/09 cost of service
per complaint
Region A
Region B
$480,000
550
$234,000
260
$528.00
$535.00
assessments otherwise conducted by District
We are also looking at ways of achieving greater
Health Boards and will reduce the number of
efficiencies in the cost of transporting food
checks from four to two. It is too early to quantify
exhibits and samples for testing.
the reduction in cost per application, but it is
expected costs to applicants will reduce by more
than 30%.
• Purchasing scientific input into food safety
decisions
Through greater use of industry, cross–
departmental funding and NZFSA science funding,
we will be able to purchase more scientific input
for the same Crown funding for 2009/10.
PAGE 24
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Reducing investment in the core contract for science delivery, and buying more targeted and
competitive science contracts, will provide more efficient use of funding. In some cases we have also
collaborated with industry to identify research that is mutually beneficial and can be jointly funded.
Cost of core scientific services purchased/proposed
Number of scientific studies contracted across all science funding
2008/09
2009/10
$3m
$2.4m
an additional
30–40% of
scientific studies
In the future, NZFSA hopes to improve efficiencies through more open tendering for services and
collaborative initiatives.
Cost benefit analysis of NZFSA interventions
• The Campylobacter risk management strategy
90% of the
The NZFSA Campylobacter risk management strategy aims to reduce New Zealand’s high rate of locally
approximately $86
contracted foodborne campylobacteriosis over a five year period. Two and a half years into the strategy,
million annual cost of
the results are encouraging.
all foodborne illness
in NZ is estimated to
The ongoing cost to the Crown of running this strategy is relatively low. We recognise there are
ongoing compliance costs for industry but there are also commercial benefits through lower foodborne
campylobacteriosis levels.
be due to foodborne
campylobacteriosis
The results
2007
2008
Reduction
Notified number of cases of
campylobacteriosis annually
Estimated number (and rate
per 100,000 of estimated
population) of notified cases
that are foodborne and
contracted in NZ
Estimated number of
population sick from
foodborne campylobacteriosis
(including those not
necessarily seeking medical
treatment or notified)
12,776
6,693
6,847 (162)
3,521 (83)
53,400
27,500
6,083
3,326 (80)
26,000
The costs
Estimated
Approximate annual cost of campylobacteriosis 2004–2007
to New Zealand society
Approximate annual savings to NZ society through the reduction in
campylobacteriosis levels 2008 year
Approximate annual ongoing cost to NZFSA of the Campylobacter risk
management strategy
Approximate cost to Crown per reduction in each notified case of
campylobacteriosis (attributable to food and contracted in NZ)
between 2007 and 2008
Annual cost per reduction in estimated incidences of sickness due to
foodborne campylobacteriosis in the population, amongst cases not
necessarily notified or seeking medical treatment (ratio of 1:8 reported
cases to total estimated cases)
$74m
$36m
Ongoing cost to NZFSA:
approx $950,000 per year
$950,000 ÷ 3,326 = $285
$950,000 ÷ 26,000 =
$36.50
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 25
• Collaborative meat hygiene programme
We have been collaborating with the meat industry to continuously improve the hygiene of processing
practices for meat. While current practices are world class we think there is always room for
improvement.
To achieve this we have taken a three-pronged approach to:
•
examine current processing practices
•
research improvements that could reduce contamination levels, and
•
undertake a programme of testing on the processing chain.
Continuous improvements in reducing the levels of food pathogens is always good news for
consumers. This programme has the added advantage to the meat industry of making sure hygiene
practices are cost effective.
• Proving we meet overseas market requirements
NZFSA’s robust testing programmes and data management systems allow us to demonstrate to overseas
markets that our pathogen levels are comparable, if not better, than their specific market requirements.
This information is collated and analysed in the National Microbiological Database (NMD).
Overseas officials have confidence in the government assurances that underpin our exports because
our systems are equal to, if not better than, overseas systems in terms of food safety outcomes.
Approx NZFSA cost of collecting information and maintaining the NMD
Value of exported meat products in 2008
Cost to industry of NMD per $ of meat exported
$153,000
$5.14b
$0.000029
Gaining a better understanding of our cost drivers
• Verification Agency cost effectiveness review
NZFSA has commissioned an external review to analyse the cost effectiveness of the NZFSA Verification
Agency’s (VA) operations. This study began in May 2009 and will continue in a staged manner during
2009. The review aims to assess the efficiency and effectiveness of the VA in service delivery and
achieving government objectives, It will also assess the appropriateness of current service levels and
service delivery models.
The data collected as part of the initial stages of the study has already proved of interest. The first step
has been to benchmark the costs and benefits of the VA’s activities.
PAGE 26
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Statement of Service Performance
and Financial Statements
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 27
Statement of responsibility
In terms of the Public Finance Act 1989, I am responsible, as Chief Executive of the New Zealand Food Safety
Authority, for the preparation of the Authority’s financial statements, statement of service performance and
non-departmental statements and schedules, and for the judgements made in them.
I have the responsibility for establishing, and I have established, a system of internal control designed to
provide reasonable assurance as to the integrity and reliability of financial reporting.
In my opinion, these financial statements and statement of service performance fairly reflect the financial
position and operations of the Authority for the year ended 30 June 2009.
Andrew McKenzie
Gary Lewis
Chief Executive
Director Finance
17 September 2009
17 September 2009
PAGE 28
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Statement of Service Performance
Output class: Food safety information and participation
Scope: This appropriation is limited to activities to engage and inform stakeholders about food safety and suitability and to
encourage participation in NZFSA’s regulatory programme. The appropriation encompasses the provision of information (and
information gathering) through a range of channels, including consumer help-lines, publications, web-based tools, consumer
education and events.
Actual 2007/08
8,628 helpline calls
and email questions
responded to
Performance
measures
14,000–16,000 calls
responded to on
the 0800 consumer
helpline
Achieved/
Not Achieved
Performance to 30 June 2009
NZFSA received and responded to 3,706 phone enquiries on our
0800 number and 4,877 website enquiries in the 2008/09 year.
Not
Achieved
The expected total was over-estimated and we are consistently
receiving in the vicinity of 8,500 enquiries each year. We are
unsure whether our interventions will increase or decrease the
volume of enquiries in the future. Volumes are also likely to vary
as food issues, whether real or perceived, enter the public arena.
The type of enquiries over the year has been broken down into
categories and analysed. The largest proportion was people
wanting NZFSA resources for projects or research; the next most
popular enquiry topic was reporting a food complaint, followed
by animal products processing and regulation enquiries.
new measure
15,000 Food Focus
publications issued
per quarter
NZFSA has distributed approximately 15,000 copies of Food Focus
magazine each quarter during this financial year. This publication
is an important communication tool for NZFSA, allowing us to
communicate with a variety of stakeholders. Food Focus will be
produced three times a year from July 2009.
Achieved
new measure
Evaluation of
Foodsafe Partnership
campaign confirms
all objectives met
An internal evaluation was conducted of the Foodsafe
Partnership campaign. This involved collating the media coverage
and estimating the value, looking at what activities the partners
in the campaign have undertaken and the value of these, plus
the cost per thousand reached of the TV advertising.
Achieved
Although we would like to robustly analyse the resulting change
in consumer behaviour, we have not yet been able to undertake,
at reasonable cost, the type of study required. However, we
feel that there is enough evidence from similar health-based
information campaigns here and overseas to have confidence in
the logic of the messages and delivery.
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
3,400
3,651
683
323
Total Revenue
4,083
3,974
Expenses
4,083
3,748
0
226
Budget output class – Food safety information and participation Revenue Crown
Revenue Other
Net Surplus/ (Deficit)
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 29
Output class: Monitoring and assurance
Scope: This appropriation is limited to delivering assurances to consumers, the public and overseas authorities that food,
food-related products and inputs into the production of food are managed and delivered in accordance with New Zealand
legislation and importing countries’ market access requirements.
Performance
measures
Actual 2007/08
new measure
200,000 export
certificates issued
Achieved/
Not Achieved
Performance to 30 June 2009
A review of export e-cert data for 2007/08 shows there were
92,032 e-certs issued, indicating that the 200,000 performance
target was inaccurate.
Not
Achieved
Export certificates comprise export e-certs and paper certificates.
During 2008/09, the following export certificates were issued:
• 90,505 export e-certs and 5,000 paper certificates for animal
products and materials (excluding dairy)
• 33,098 export e-certs for dairy products
Total = 128,603 export certificates issued
In addition to the export certificates issued, the NZFSAVA also issued
362,335 electronic eligibility documents for the meat industry.
While volume data provides important contextual information for
performance in this area, the number of export certificates issued is
out of NZFSA’s control. The performance standards have therefore
been changed for the 2009/10 year to reflect controllable aspects
of service delivery, such as accuracy and timeliness.
100% of all audits of
NZFSAVA’s delivery
programmes are
deemed appropriate
by internal and
external audits
100% of IANZ assessments verified NZFSA processes.
new measure
99.5% Electronic
Certification System
online availability
Availability over 2008/09 was 99.83% for dairy and 99.89% for
animal products
Achieved
11 out of 12 or
91.6% complying
95% of all District
Health Boards are
deemed compliant
with relevant
standards and
food legislation as
assessed by NZFSA
targeted assessment
NZFSA’s assessment of PHU performance against key
performance indicators identified 57% compliance.
Not
Achieved
95% of all audited
delivery programmes
are deemed
appropriate by internal
(NZFSA) and external
audits by importing
country competent
authorities
95% of audited programmes were deemed appropriate on first
pass and 100% on follow-up by internal and extrinsic (external)
audits.
ISO 17020 achieved
IANZ assessment
100% pass of audits
by EU and USFDA
new measure
Achieved
Next IANZ audit November 2009.
As a result, a review was conducted and recommendations
resulted in the truncation of contracted services and savings in
line with those agreed in Budget 2009.
Two District Health Boards chose not to renew contracts. Services
will be provided by NZFSA.
Achieved
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
Revenue Crown
2,328
2,251
Revenue Other
47,093
47,813
Total Revenue
49,421
50,064
Expenses
46,189
52,271
3,232
(2,207)
Budget output class – Monitoring and assurance
Net Surplus/ (Deficit)
PAGE 30
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Output class: Policy advice on food safety and suitability
Scope: This appropriation is limited to analysis, policy and legal advice and decision-making support relating to food safety,
food suitability, inputs related to food production, and ministerial services.
Actual 2007/08
Performance
measures
Achieved/
Not Achieved
Performance to 30 June 2009
83% accepted for
Over 95% of
content on first draft Ministerial letters
accepted on first
draft (for content)
NZFSA processed 243 Ministerial letters during 2008/09.
No data
Over 95% of
Ministerial letters
submitted to
Minister’s office
within 15 days after
receipt
Data is not kept on this indicator and it was included in error. This
indicator has been removed for the 2009/10 year.
Not
assessed
98% submitted
within 20 days
100% of Ministerial
letters submitted to
the Minister’s office
within 20 days after
receipt
90% of Ministerial responses were submitted to the Minister’s
office within 20 days of receipt.
Not
achieved
99% of Cabinet
papers submitted
to the Cabinet
Committee by the
due date
NZFSA produced and forwarded 20 Cabinet papers during
2008/09.
100% submitted
within timeframes
Achieved
95.1% of letters were accepted at first draft (for content),
an improvement on the 2007/08 year of 12.1%.
Another 2.4% were processed within the 20 day timeframe, but
were received during the election period and held back for the
new Minister to reply.
Achieved
100% of Cabinet papers were submitted to the Minister for
submission to the Cabinet Committee by the due date.
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
6,187
6,409
21
39
Total Revenue
6,208
6,448
Expenses
6,208
6,255
0
193
Budget output class – Policy advice on food safety and suitability Revenue Crown
Revenue Other
Net Surplus/ (Deficit)
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 31
Output class: Response to food related emergencies and events
Scope: This appropriation is limited to managing preparedness and operational response to food related events and food
safety emergencies.
Actual 2007/08
new measure
new measure
Performance
measures
Achieved/
Not Achieved
Performance to 30 June 2009
Systems and
measures to limit
the impact of events
that pose a threat to
human health or to
the integrity of the
New Zealand food
safety programmes
are maintained in
accordance with
the standards as
determined by post
event evaluation on
a case-by-case basis
NZFSA event and emergency response protocols represent agreed
best practice. We have been taking a cross-government approach
to our response protocols and are working to ensure there is
standardisation and consistency.
Emergency
responses are
managed in an
effective manner
(limiting adverse
impacts on health
and the integrity of
New Zealand food
safety programmes)
as measured by
internal review
Events are categorised according to the nature of the possible
impact and whether or not they can be responded to by NZFSA
or require a multi-agency or multinational approach.
Achieved
A Food Incident Response Protocol has been agreed to by NZFSA
and all Australian food regulatory agencies.
We have also concluded an MoU with the New South Wales
Food Safety Authority to ensure that we standardise our
emergency responses and recalls of food products.
Achieved
During 2008/09, there were:
• no category 1 incidents
• 5 category 2 incidents, including the toxic honey, melamine
and Salmonella in flour incidents.
• 5 category 3 incidents
• no statutory recalls
• 18 voluntary recalls of food products and 30 voluntary product
withdrawals.
Appropriate response to these incidents was activated within six
hours of initial notification.
NZFSA responses to events are in accordance with cross
government and agreed international systems.
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
361
369
5
Total Revenue
361
374
Expenses
361
346
0
28
Budget output class – Response to food related emergencies and events Revenue Crown
Revenue Other
Net Surplus / (Deficit)
PAGE 32
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Output class: Standards setting
Scope: This appropriation is limited to the development, implementation, monitoring and review of food related standards
and inputs into food production for both the domestic and export market. The appropriation encompasses inputs into joint
standard setting arrangements with Australia and influencing standards for trade set by international organisations.
Actual 2007/08
101 standards
developed
Performance
measures
Develop 94
standards according
to the NZFSA
documented
processes with
95% of standards
meeting the
specified NZFSA
timeframes
Achieved/
Not Achieved
Performance to 30 June 2009
During 2008/09 NZFSA developed 144 standards.
Achieved
This comprised:
• 2 ACVM standards
• 19 Joint Food Standards
• 13 NZ Standards
• 2 Import standards
• 108 Export Standards
All standards were developed within NZFSA specified timeframes
whether legislative or internal policy.
new measure
49 standards
reviewed
Implement
103 standards
according to NZFSA
documented
processes with
95% of standards
meeting the
specified NZFSA
timeframes
During 2008/09 175 standards were implemented, including:
Review 36 standards
according to NZFSA
documented
processes with
95% of standards
meeting the
specified NZFSA
timeframes
During 2008/09 NZFSA reviewed 77 standards, including:
Achieved
• 4 ACVM standards
• 17 joint food standards
• 1 NZ standard
• 137 export standards
• 2 import standards
Achieved
• 2 ACVM standards
• 6 joint food standards
• 6 NZ standards
• 20 export standards
• 19 import standards
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
Revenue Crown
17,858
18,454
Revenue Other
13,287
11,219
Budget output class – Standards setting Total Revenue
31,145
29,673
Expenses
31,684
27,969
Net Surplus/ (Deficit)
(539)
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 33
1,704
Output class: Systems audit and enforcement
Scope: This appropriation is limited to the audit and enforcement programme administered by NZFSA, as well as
investigations of and response to problems, complaints and suspected breaches of legislation.
Actual 2007/08
228 audits
completed as
scheduled
Performance
measures
Performance to 30 June 2009
Scheduled quantity:
2 of 3 scheduled complex audits have been completed
• 2–3 large complex
audits of more
then 25 days
60 moderately complex audits were completed
• 45–55 moderately
complex audits of
between 10 and
25 days
• 180–200 single
site audits/
assessments of
less than 10 days
Achieved/
Not Achieved
Partly
Achieved
130 single site audits completed in 2008/09 year
The quantity figures for audits should have been indicative
numbers only. The audit schedule is a rolling list.
Each year NZFSA ensures that the audits identified as high-risk
are conducted, but the schedule must be flexible enough to react
to unplanned events or visits from external auditing teams.
4 extrinsic audits
100% of extrinsic
conducted with
reviewer analysis
100% substantiation of audit outcomes
substantiates the
systems providing
NZFSA food safety
and market access
assurances
4 extrinsic audits conducted with 100% substantiation
Achieved
91% (10 out of 11)
proceeded
95% of investigation
files presented
for public interest
assessment proceed
to prosecution
100%, or six out of six matters presented for assessment
proceeded to prosecution.
Achieved
Fewer than 5% of
prosecution cases
lodged with the
court incur adverse
judicial comment
No cases incurred adverse judicial comment
No cases incurred
adverse judicial
comment
7 prosecutions were completed this financial year and another 7
commenced.
Achieved
Financial performance
2008/09
Budget (Mains)
$000
2008/09
Actual
$000
Revenue Crown
3,335
3,738
Revenue Other
1,500
1,592
Total Revenue
4,835
5,330
Expenses
4,835
4,769
0
561
Budget output class – Systems audit and enforcement Net Surplus/ (Deficit)
PAGE 34
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Non-departmental other expenses:
New Zealand-Australia Joint Food Standards Setting Treaty
Scope: This appropriation is limited to the development of joint food standards and codes of practice for Australia and New
Zealand by Food Standards Australia New Zealand in accordance with the Joint Food Standards Setting Treaty.
Actual 2007/08
Performance
measures
100% completion
of the annual FSANZ
work programme
Performance to 30 June 2009
Achieved/
Not Achieved
100% of the FSANZ work programme was completed by NZFSA.
Achieved
This involved:
• processing and responding to 18 submissions, and
• preparing 29 briefings on applications/proposals
19 applications and proposals resulted in amendments to the
Food Standards Code.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 35
Financial Statements
Statement of Financial Performance
For the year ended 30 June 2009
Actual
2008
$000
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
34,872
33,469
34,872
2
60,882
62,584
63,704
3
109
-
30
95,863
96,053
98,606
Notes
Income
31,595 Revenue Crown
59,109 Revenue other
16 Gains
90,720 Total income
Expenditure
48,160 Personnel costs
4
52,165
49,510
50,855
9,10
3,166
4,864
4,166
2 Capital charge
5
87
196
85
38,177 Other operating costs
6
39,940
38,790
43,257
95,358
93,360
98,363
505
2,693
243
3,085 Depreciation and amortisation expense
89,424 Total operating expenditure
1,296 Net surplus / (deficit)
Explanations of significant variances against budget are detailed in note 23
The accompanying notes form part of these financial statements.
PAGE 36
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Statement of Financial Position
As at 30 June 2009
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
12,792
14,707
10,478
5,021
3,700
5,700
214
70
60
126
130
120
18,153
18,607
16,358
9
2,312
2,224
2,184
5,077 Intangible assets
10
3,869
7,129
5,838
- Work in Progress
9,10
633
-
-
6,814
9,353
8,022
24,967
27,960
24,380
Actual
2008
$000
Notes
Assets
Current assets
8,869 Cash and cash equivalents
5,907 Debtors and other receivables
7
60 Prepayments
126 Inventory
8
14,962 Total current assets
Non-current assets
2,410 Property, plant and equipment
7,487 Total non-current assets
22,449 Total assets
Liabilities
Current Liabilities
7,594 Creditors and other payables
11
7,011
5,000
7,960
1,296 Provision for repayment of surplus
13
505
2,693
243
3,409 Deferred revenue
12
4,415
6,000
5,300
195 Provisions
4,073 Employee entitlements
14
313
400
190
15
4,286
4,500
3,700
16,530
18,593
17,393
12
545
-
-
14
346
300
320
16,567 Total current liabilities
Non-current liabilities
1,983 Deferred revenue
322 Provisions
3,535 Employee entitlements
15
4,379
3,900
3,500
5,270
4,200
3,820
22,407 Total liabilities
21,800
22,793
21,213
42 Net assets
3,167
5,167
3,167
3,167
5,167
3,167
3,167
5,167
3,167
5,840 Total non-current liabilities
Taxpayers’ funds
42 General funds
42 Total taxpayers’ funds
16
The accompanying notes form part of these financial statements.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 37
Statement of Changes in Taxpayers’ Funds
For the year ended 30 June 2009
Actual
2008
$000
Notes
- Balance at 1 July
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
42
42
42
1,296 Surplus/ (deficit) for the year
505
2,693
243
1,296 Total recognised income and expense
547
2,735
285
(505)
(2,693)
(243)
(1,296) Repayment of surplus to the Crown
13
4,780 Capital contribution
3,125
5,125
3,125
(2,280) Establishment of Memorandum Accounts (non cash)
-
-
-
(2,458) Transfer to Ministry of Agriculture and Forestry
upon establishment of Authority (non cash)
-
-
-
3,167
5,167
3,167
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
31,595 Receipts from Crown
34,872
33,469
34,830
56,658 Receipts from revenue other
61,036
62,584
63,836
(34,591) Payments to suppliers
(40,785)
(38,790)
(41,948)
(46,842) Payments to employees
(51,416)
(49,010)
(52,606)
42 Balance at 30 June
Statement of Cash Flows
For the year ended 30 June 2009
Actual
2008
$000
Notes
Cash Flows from operating activities
(2) Payments for capital charge
6,818 Net cash from operating activities
(87)
17
(196)
(85)
3,620
8,057
4,027
205
-
-
Cash Flows from investing activities
44 Receipts from sale of property, plant and equipment
(1,004) Purchase of property, plant and equipment
(843)
(1,225)
(716)
(1,815) Purchase of intangible assets
(1,746)
(4,700)
(3,985)
(2,775) Net cash from investing activities
(2,384)
(5,925)
(4,701)
3,125
5,125
3,125
Cash flows from financing activities
4,780 Capital injections from the Crown
- Payment of Surplus to the Crown
46 Goods and services tax (net)
(1,296)
-
(1,296)
858
-
454
4,826 Net cash from financing activities
2,687
5,125
2,283
8,869 Net increase/ (decrease) in cash
3,923
7,257
1,609
8,869
7,450
8,869
12,792
14,707
10,478
- Cash at the beginning of the year
8,869 Cash at the end of the year
The GST (net) component of operating activities reflects the net GST paid and received with the Inland Revenue Department.
The GST (net) component has been presented on a net basis, as the gross amounts do not provide meaningful information for
financial statement purposes.
The accompanying notes form part of these financial statements.
PAGE 38
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Statement of Commitments
As at 30 June 2009
Non-cancellable operating lease commitments
The Authority leases property, plant and equipment in the normal course of business. The majority of these leases are for
premises and photocopiers, which have a non-cancellable leasing period ranging from one to four years.
Actual
2008
$000
Actual
2009
$000
Non-cancellable operating lease commitments
1,505 Not later than one year
2,186
2,835 Later then one year and not later than five years
2,266
- Later than five years
105
4,340 Total non-cancellable lease commitments
4,557
The Authority’s non-cancellable operating leases have varying terms, escalation clauses and renewal rights.
Other non-cancellable commitments
The Authority has entered into non-cancellable contracts for consulting and other contracts for services.
Actual
2008
$000
Actual
2009
$000
Other non-cancellable commitments
- Not later than one year
3,052
- Later then one year and not later than five years
4,419
- Later than five years
-
- Total non-cancellable commitments
7,471
The Authority’s non-cancellable commitments have varying terms, escalation clauses and renewal rights.
In line with best practice and in aligning practice with the government mandatory procurement guidelines, NZFSA has
conducted a number of tenders during the year for mainly scientific work. A number of these contracts have been negotiated
for provision of services beyond one year. No such commitments existed in 2007/08.
Statement of Contingent Liabilities and Contingent Assets
As at 30 June 2009
Unqualified contingent liabilities
The Authority has no unquantifiable contingent liabilities. (Nil in 2008).
Quantifiable contingent liabilities
The Authority has no quantifiable contingent liabilities. (Nil in 2008).
Contingent assets
The Authority has no contingent assets. (Nil in 2008).
Legal proceedings and disputes
There are no legal proceedings or disputes against the Authority. (Nil in 2008).
The accompanying notes form part of these financial statements.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 39
Statement of Departmental Unappropriated Expenditure
and Capital Expenditure
For the year ended 30 June 2009
Expenditure
After
Remeasurements
2009
$000
Appropriations
Voted
2009
$000
Unappropriated
Expenditure
2009
$000
6,255
6,427
-
27,969
29,682
-
Vote Food Safety
Appropriations for output expenses
Policy advice on food safety
Standards setting
Response to food emergencies
346
369
-
Systems audit and enforcement
4,769
5,237
-
Food safety information
3,748
4,336
-
Monitoring and assurance
52,271
52,312
-
Total Vote Food Safety
95,358
98,363
-
Expenses incurred in excess of appropriation
Nil
Capital expenditure incurred in excess of appropriation
Nil
Breaches of departmental net asset schedules
Nil
Statement of Departmental Expenses
and Capital Expenditure against Appropriations
For the year ended 30 June 2009
Expenditure
After
Remeasurements
2008
$000
Expenditure
Before
Remeasurements
2009
$000
Remeasurements
2009
$000
Expenditure
After
Remeasurements
2009
$000
Appropriation
Voted
2009
$000
Vote Food Safety
Appropriations for output expenses
3,953 Policy advice on food safety
6,255
-
6,255
6,427
27,969
-
27,969
29,682
346
-
346
369
4,441 Systems audit and enforcement
4,769
-
4,769
5,237
3,760 Food safety information
3,748
-
3,748
4,336
40,107 Monitoring and assurance
52,271
-
52,271
52,312
89,424 Total Vote Food Safety
95,358
-
95,358
98,363
36,520 Standards setting
643 Response to food emergencies
The accompanying notes form part of these financial statements.
PAGE 40
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Notes to the Financial Statements
1
Statement of Accounting Policies for the year
ended 30 June 2009
Reporting entity
The New Zealand Food Safety Authority (the Authority)
is a government department as defined by section 2
of the Public Finance Act 1989 and is domiciled in
New Zealand.
In addition, the Authority has reported on Crown
activities which it administers.
The primary objective of the Authority is to provide
services to the public rather than making a financial
return. Accordingly the Authority has designated itself
as a public benefit entity for the purposes of New
Zealand equivalents to International Financial Reporting
Standards (NZ IFRS).
The financial statements of the Authority are for the
year ended 30 June 2009. The financial statements
were authorised for issue by the Chief Executive of the
Authority on 17 September 2009.
Basis of preparation
The financial statements of the Authority have been
prepared in accordance with the requirements of
the Public Finance Act 1989, which includes the
requirement to comply with New Zealand generally
accepted accounting practices (NZ GAAP).
These financial statements have been prepared
in accordance with, and comply with, NZ IFRS as
appropriate for public benefit entities.
The Authority was established as a stand alone
government department on 1 July 2007.
The accounting policies set out below have been
applied consistently to the period presented in these
financial statements.
The financial statements have been prepared on an
historical cost basis.
The financial statements are presented in New Zealand
dollars and all values are rounded to the nearest
thousand dollars ($000). The functional currency of the
Authority is New Zealand dollars.
Standards, amendments and interpretations
issued but not yet mandatory and not early
adopted
NZIFRS1 (Presentation of Financial Statements) issued
in 2004, was revised in 2007. The revised statement
is effective for reporting periods beginning on or
after 1 January 2009. The revised standard requires
information in financial statements to be aggregated
on the basis of shared characteristics and introduces
a statement of comprehensive income. The revised
standard gives the New Zealand Food Safety Authority
the option of presenting items of income and expenses
and components of other comprehensive income either
in a single statement of comprehensive income with
subtotals, or in two separate statements. Adoption of
NZIFRS1: Presentation of Financial Statements (Revised)
result in presentation changes only. The Authority intends
to adopt this standard for the year ending 30 June 2010.
Revenue
Revenue is measured at the fair value of consideration
received.
Revenue Crown
Revenue earned from the supply of outputs to the
Crown is recognised as revenue when earned.
Statutory Levies
Revenue from levies is recognised when the obligation
to pay the levy is incurred.
Application Fees
Revenue from application fees is recognised to the extent
that the application has been processed by the Authority.
Capital charge
The capital charge is recognised as an expense in the
period to which it relates.
Leases
Operating Leases
An operating lease is a lease that does not transfer
substantially all the risks and rewards incidental to
ownership of an asset. Lease payments under an
operating lease are recognised as an expense on a
straight-line basis over the lease term.
Financial instruments
Financial assets and financial liabilities are initially
measured at fair value plus transaction costs unless
they are carried at fair value through profit or loss in
which case the transaction costs are recognised in the
statement of financial performance.
Cash and cash equivalents
Cash includes cash on hand and funds on deposit with
banks.
Debtors and other receivables
Debtors and other receivables are initially measured
at fair value and subsequently measured at amortised
cost using the effective interest rate, less impairment
changes.
Impairment of a receivable is established when there is
objective evidence that the Authority will not be able
to collect amounts due according to the original terms
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 41
of the receivable. Significant financial difficulties of
the debtor, probability that 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 is reduced through the use of an allowance
account, and the amount of the loss is recognised
in the statement of financial performance. Overdue
receivables that are renegotiated are reclassified as
current (ie, not past due).
Inventories
Inventories held for distribution, or consumption in the
provision of services, that are not issued on a commercial
basis are measured at the lower of cost (calculated
using the weighted average method) and current
replacement cost. Where inventories are acquired at no
cost, or for nominal consideration, the cost is the current
replacement cost at the date of acquisition.
The write-down from cost to current replacement cost
or net realisable value is recognised in the statement of
financial performance in the period when the writedown occurs.
Accounting for derivative financial instruments,
hedging activities and foreign currency
transactions
The Authority does not hold or issue derivative financial
instruments for trading purposes. The Authority has not
adopted hedge accounting.
Derivatives are initially recognised at fair value on
the date a derivative contract is entered into and are
subsequently remeasured at their fair value at each
balance date. Movements in the fair value of derivative
financial instruments are recognised in the statement of
financial performance.
Foreign currency transactions are translated into New
Zealand dollars using the exchange rates prevailing
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such
transactions are recognised in the statement of financial
performance.
Property, plant and equipment
Property, plant and equipment consists of leasehold
improvements, furniture and office equipment, and
motor vehicles. Property, plant and equipment is
shown at cost, less accumulated depreciation and
impairment losses.
Individual assets, or group of assets, are capitalised
if their cost is greater than $5,000. The value of an
individual asset that is less than $5,000 and is part of a
group of similar assets is capitalised.
PAGE 42
Additions
The cost of an item of property, plant and equipment is
recognised as an asset if, and only if, it is probable that
future economic benefits or service potential associated
with the item will flow to the Authority and the cost of
the item can be measured reliably. In most instances,
an item of property, plant and equipment is recognised
at its cost. Where an asset is acquired at no cost, or for
a nominal cost, it is recognised at fair value as at the
date of acquisition.
Assets inherited from the Ministry of Agriculture and
Forestry are recorded at their fair value.
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 financial performance.
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 the Authority and the cost of the
item can be measured reliably.
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 2 to 8 years
(12.5 – 50%)
Furniture and office equipment
3 to 9 years
(11.1 – 33%)
Motor vehicles 2 to 6 years
(16.6 – 50%)
Leasehold improvements are depreciated over the
unexpired period of the lease or the 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 associated with maintaining computer software
are recognised as an expense when incurred. Costs
that are directly associated with the development
of software for internal use by the Authority, are
recognised as an intangible asset. Direct costs include
the software development, employee costs and an
appropriate portion of relevant overheads.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Individual assets, or group of assets, are capitalised
if their cost is greater than $5,000. The value of an
individual asset that is less than $5,000 and is part of a
group of similar assets is capitalised. Staff training costs
are recognised as an expense when incurred.
Intangible assets inherited from the Ministry of
Agriculture and Forestry are recorded at their fair value.
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 financial performance.
The useful lives and associated amortisation rates of
major classes of intangible assets have been estimated
as follows:
Acquired computer software 3 years
Developed computer software
2 to 10 years
(33%)
(20% – 50%)
Acquired software is primarily provided by the Ministry
of Agriculture and Forestry under a Service Level
Agreement.
Impairment of non-financial 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 assets carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an
assets fair value less costs to sell and value in use.
Value in use is depreciated replacement cost for an
asset where the future economic benefits or service
potential of the asset are not primarily dependent on
the assets ability to generate net cash inflows and
where the entity would, if deprived of the asset, replace
its remaining future economic benefits or service
potential.
If an asset’s carrying amount exceeds its recoverable
amount, the asset is impaired and the carrying amount
is written down to the recoverable amount.
The total impairment loss is recognised in the statement
of financial performance.
The reversal of an impairment loss is recognised in the
statement of financial performance.
Creditors and other payables
Creditors and other payables are initially measured at
fair value and subsequently measured at amortised cost
using the effective interest method.
Employee entitlements
Short-term employee entitlements
Employee entitlements that the Authority expects to be
settled within 12 months of balance date are measured
at nominal values based on accrued entitlements at
current rates of pay. These include salaries and wages
accrued up to balance date, annual leave earned but
not yet taken at balance date, retiring and long service
leave entitlements expected to be settled within 12
months, and sick leave.
The Authority recognises a liability for sick leave to the
extent that absences in the coming year are expected
to be greater than the sick leave entitlements earned
in the coming year. The amount is calculated based
on the unused sick leave entitlement that can be
carried forward at balance date, to the extent that the
Authority anticipates it will be used by staff to cover
those future absences.
Long-term employee entitlements
Entitlements that are payable beyond 12 months, such
as long service leave and retiring leave, have been
calculated on an actuarial basis. The calculations are
based on:
• likely future entitlements based on years of service,
years to entitlement, the likelihood that staff will
reach the point of entitlement and contractual
entitlements information
• the present value of the estimated future cash
flows. A weighted average discount rate of 5.3%
and a salary inflation factor of 3.0% were used. The
discount rate is based on the weighted average of
government bonds with terms to maturity similar to
those of the relevant liabilities. The inflation factor
is based on the expected long-term increase in
remuneration for employees.
Superannuation schemes
Defined contribution schemes
Obligations for contributions to the State Sector
Retirement Savings Scheme, KiwiSaver and the
Government Superannuation Fund are accounted for as
defined contribution schemes and are recognised as an
expense in the statement of financial performance as
incurred.
Provisions
The Authority 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 and it is probable that an outflow
of future economic benefits will be required to settle
the obligation and a reliable estimate can be made
of the amount of the obligation. Provisions are not
recognised for future operating losses.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 43
Provisions are measured at the present value of the
expenditures expected to be required to settle the
obligation using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the obligation. The increase in
the provision due to the passage of time is recognised
as a finance cost.
ACC Partnership Programme
The Authority belongs to the ACC Partnership Programme
whereby the Authority accepts the management and
financial responsibility of work related illnesses and
accidents of employees. Under the Programme the
Authority is liable for all its claims costs for a period of two
years up to a specified maximum. At the end of the two
year period, the company pays a premium to ACC for the
value of residual claims, and the liability for ongoing claims
from that point passes to ACC.
The liability for the ACC Partnership Programme is
measured based on the best estimate of expected future
payments expected to be made in respect of the employee
injuries and claims up to the reporting date. Consideration
is given to expected future wage and salary levels and
experience of employee claims and injuries.
Taxpayers’ funds
Taxpayers’ funds is the Crown’s investment in the
Authority and is measured as the difference between
total assets and total liabilities. Taxpayers’ funds is
disaggregated and classified as general funds and
property, plant and equipment revaluation reserves.
Commitments
Expenses yet to be incurred on non-cancellable
contracts that have been entered into on or before
balance date are disclosed as commitments to the
extent that there are equally unperformed obligations.
Cancellable commitments that have penalty or exit
costs explicit in the agreement on exercising that option
to cancel are included in the statement of commitments
at the value of that penalty or exit cost.
Goods and Services Tax (GST)
All items in the financial statements, including
appropriation statements, are stated exclusive of GST,
except for receivables and payables, which are stated
on a GST inclusive basis. Where GST is not recoverable
as input tax, then it is recognised as part of the related
asset or expense.
The net amount of GST recoverable from, or payable to,
the Inland Revenue Department (IRD) is included as part
of receivables or payables in the statement of financial
position. The net GST paid to, or received from the IRD,
including the GST relating to investing and financing
activities, is classified as an operating cash flow in the
statement of cash flows.
Income tax
Government departments are exempt from income tax
as public authorities. Accordingly, no charge for income
tax has been provided for.
Budget figures
The budget figures used for comparison figures (Mains
and Supplementary Estimates) are those provided to
Treasury. These figures are consistent with the financial
information in the Supplementary and Main Estimates.
Statement of cost accounting policies
The Authority 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 costs that cannot be
identified in an economically feasible manner with a
specific output.
Direct costs are charged directly to outputs. Indirect
costs are assigned to business groups based on various
cost drivers including assessed charges and usage,
personnel numbers and estimated allocation of time.
Critical accounting estimates and assumptions
In preparing these financial statements the Authority
has made estimates and assumptions concerning the
future. These estimates and assumptions may differ
from the subsequent actual results. Estimates and
judgements are continually evaluated and are based
on historical experience and other factors, including
expectations of future events that are believed to be
reasonable under the circumstances. The estimates
and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are
discussed below:
Retirement and long service leave
Note 15 provides an analysis of the exposure in relation
to estimates and uncertainties surrounding retirement
and long service leave liabilities.
Critical judgements in applying the Authority’s
accounting policies
Management has exercised the following critical
judgement in applying the Authority’s accounting
policies for the period ended 30 June 2009.
The initial cost of property, plant and equipment assets
as well as intangible assets, inherited from the Ministry
of Agriculture and Forestry, is the net book value of
those assets at the time of the establishment of the
Authority. This is deemed to equate to the fair value of
those assets to the Authority.
Commitments and contingencies are disclosed exclusive
of GST.
PAGE 44
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
2
Revenue other:
Actual
2008
$000
Actual
2009
$000
17,241 Standards setting
16,903
36,195 Verification services to the animal products industry
37,499
4,153 Approvals, accreditations and registrations
4,389
1,071 State Sector Retirement Savings Scheme recovery
1,211
449 Other goods and services
880
59,109 Total revenue other
60,882
Refer to note 22 on page 54 for 2008 comparative figures.
3
Gains:
Actual
2008
$000
Actual
2009
$000
16 Net gain on disposal of property, plant and equipment
109
16 Total Gains
109
4 Personnel costs:
Actual
2008
$000
Actual
2009
$000
41,316 Salaries and wages
45,355
1,277 Employer contributions to defined contribution superannuation plans
1,459
753 Increase / (decrease) in employee entitlements
1,153
4,814 Other personnel costs
4,198
48,160 Total personnel costs
52,165
Employee Entitlements comparative figures have been restated to better reflect the true nature and comparison of the
expenditure incurred.
5
Capital charge:
The Authority pays a capital charge to the Crown on its taxpayers’ funds as at 30 June and 31 December. The capital
charge rate for the year ended 30 June 2009 was 7.5%.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 45
6
Other operating costs:
Actual
2008
$000
Actual
2009
$000
116 Audit Fees for audit of financial statements
120
5 Audit fees for assurance and related services
-
2,090 Operating lease payments
2,473
1,066 Advertising and publicity
1,595
832 Research contracts
961
2,286 Contractors
1,854
11,890 Service contracts
12,603
5,121 Travel and accommodation
4,818
8,442 Shared services
9,094
514 Property, plant and equipment and intangible asset impairment
-
5,815 Other operating expenses
6,422
38,177 Total other operating costs
7
39,940
Debtors and other receivables:
Actual
2008
$000
Actual
2009
$000
Current debtors and other receivables
3,716 Trade debtors
2,695
3,716 Net trade debtors
2,695
2,191 Accrued revenue
2,326
5,907 Total debtors and other receivables
5,021
The carrying value of debtors and other receivables approximates their fair value.
As at 30 June 2009 all overdue receivables have been assessed for impairment and appropriate provisions applied, as
detailed below:
2009
Actual
2008
$000
Gross
$000
Impairment
$000
Net
$000
2,237 Current
1,067
-
1,067
1,183 Past due 31-60 days
1,176
-
1,176
50 Past due 61-90 days
145
-
145
307
-
307
2,695
-
2,695
246 Past due > 90 days
3,716 Total
8
Inventory
Actual
2008
$000
Actual
2009
$000
126 Inventory held for use in production of goods and services
126
126 Total inventory
126
PAGE 46
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
9
Property plant & equipment
Leasehold
Improvements
$000
Furniture
& Office
Equipment
$000
Motor Vehicles
$000
Work in
Progress
$000
Total
$000
1,622
64
1,445
-
3,131
-
-
843
-
843
Cost or Valuation
Balance 1 July 2008
Additions
Disposals
-
-
1,622
64
2,053
-
3,739
Balance 1 July 2008
295
32
394
-
721
Balance at 30 June 2009
(235)
-
(235)
Accumulated depreciation
and impairment losses
Depreciation expense
417
11
Eliminate on disposal
-
-
Eliminate on revaluation
-
-
-
-
-
712
43
672
-
1,427
1,327
32
1,051
-
2,410
910
21
1,381
-
2,312
Leasehold
Improvements
$000
Furniture
& Office
Equipment
$000
Motor Vehicles
$000
Work in
Progress
$000
Total
$000
-
-
-
-
-
Additions
970
64
34
-
1,068
Transfer from Ministry of Agriculture
652
-
1,445
-
2,097
-
-
1,622
64
1,445
-
3,131
-
-
-
-
-
400
-
703
Balance at 30 June 2009
417
-
845
(139)
-
(139)
Carrying Amount
At 1 July 2008
At 30 June 2009
Cost or Valuation
Balance 1 July 2007
Disposals
Balance at 30 June 2008
(34)
-
(34)
Accumulated depreciation
and impairment losses
Balance 1 July 2007
Depreciation expense
271
32
Eliminate on disposal
-
-
(6)
-
(6)
Eliminate on revaluation
-
-
-
-
-
24
-
-
-
24
295
32
394
-
721
-
-
-
-
-
1,327
32
1,051
-
2,410
Impairment losses
Balance at 30 June 2008
Carrying Amount
At 1 July 2007
At 30 June 2008
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 47
10 Intangible assets
Acquired
Software
$000
Internally
Generated
Software
$000
Work in
Progress
$000
Total
$000
48
7,901
-
7,949
-
1,113
1,443
2,556
Cost or Valuation
Balance 1 July 2008
Additions
Disposals
-
-
48
9,014
633
9,695
-
2,872
-
2,872
Depreciation expense
16
2,305
-
2,321
Eliminate on disposal
-
-
-
-
Balance at 30 June 2009
(810)
(810)
Accumulated depreciation and impairment losses
Balance 1 July 2008
Eliminate on revaluation
-
-
-
-
16
5,177
-
5,193
At 1 July 2008
48
5,029
-
5,077
At 30 June 2009
32
3,837
633
4,502
Acquired
Software
$000
Internally
Generated
Software
$000
Work in
Progress
$000
Total
$000
-
-
-
-
Balance at 30 June 2009
Carrying amount
Cost or Valuation
Balance 1 July 2007
-
6,134
-
6,134
Additions
Transfer from Ministry of Agriculture
48
1,767
-
1,815
Disposals
-
-
-
-
48
7,901
-
7,949
-
-
-
-
Balance at 30 June 2008
Accumulated depreciation and impairment losses
Balance 1 July 2007
Depreciation expense
-
2,382
-
2,382
Eliminate on disposal
-
-
-
-
Eliminate on revaluation
-
490
-
490
Balance at 30 June 2008
-
2,872
-
2,872
At 1 July 2007
48
5,029
-
5,077
At 30 June 2008
48
5,029
-
5,077
Carrying Amount
11 Creditors and other payables
Actual
2008
$000
Actual
2009
$000
770 Creditors
6,778 Accrued expenses
46 GST payable to Inland Revenue Department
7,594 Total creditors and payables
22
6,085
904
7,011
Creditors and other payables are non-interest bearing and are normally settled on 30-day terms, therefore the carrying
value of creditors and other payables approximate their fair value.
PAGE 48
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
12 Unearned revenue
Actual
2008
$000
Actual
2009
$000
Current unearned revenue is represented by:
2,386 Verification services to the animal products industries
2,081
804 Industry funding of electronic certification
2,334
219 Other miscellaneous revenue
-
3,409 Total current portion
4,415
Non-current unearned revenue is represented by:
1,983 Industry funding of electronic certification
545
5,392 Total unearned revenue
4,960
13 Provision for repayment of surplus
Actual
2008
$000
Actual
2009
$000
1,296 Net surplus
505
1,296 Total repayment of surplus to the Crown
505
14 Provisions
Actual
2008
$000
Actual
2009
$000
Current provisions are represented by:
44 ACC Partnership Programme
104
151 NZFSA executive director awards
209
195 Total current portion
313
Non-current provisions
322 Site restoration
346
517 Total provisions
659
Provision for ACC Partnership Programme
Actual
2008
$000
Actual
2009
$000
- Opening Balance
44
130 Transfer from Ministry of Agriculture and Forestry
-
(86) Decrease in provision made during the year
-
- Increase in provision made during the year
60
- Charged against provision for the year
-
44 Closing balance
104
44 Current
104
- Non-current
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
-
PAGE 49
The liability for the ACC Partnership Programme is measured based on the best estimate of future payments expected
to be made in respect of the employee injuries and claims up to the reporting date. Consideration is given to expected
future wage and salary levels and experience of employee claims and injuries.
The Authority manages its exposure arising from the programme by promoting a safe and healthy working environment by:
• implementing and monitoring health and safety policies
• induction training on health and safety
• actively managing work place injuries to ensure employees return to work as soon as practical
• recording and monitoring work place injuries and near misses to identify risk areas and implementing mitigating actions
• identification of work place hazards and implementation of appropriate safety procedures.
The Authority has chosen a stop loss limit of 208% of the industry premium. The stop loss limit means the authority will
only carry the total cost of claims of up $206,387. The Authority is not exposed to any significant concentrations of
insurance risk as work related injuries are generally the result of an isolated event to an individual employee.
Provision for NZFSA Executive Director Awards
Actual
2008
$000
Actual
2009
$000
- Opening Balance 1 July
151
102 Transfer from Ministry of Agriculture and Forestry
-
119 Additional provision made during the year
137
(70) Charged against provision for the year
(79)
151 Closing balance
209
151 Current
209
- Non-current
-
This provision relates to awards being established to improve NZFSA’s leadership capability and its ability to deliver a
world-leading food regulatory programme.
Site restoration
Actual
2008
$000
Actual
2009
$000
- Opening Balance 1 July
300 Transfer from Ministry of Agriculture and Forestry
22 Additional provision made during the year
- Charged against provision for the year
322 Closing balance
322 Current
- Non-current
322
24
346
346
This provision is to make good any damage caused to its leased premises and to remove any fixtures or fittings installed
by the Authority upon expiry of the leases.
PAGE 50
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
15 Employee entitlements
Actual
2008
$000
Actual
2009
$000
Current employee entitlements are represented by:
305 Salaries and wages
532
3,265 Annual leave
3,301
211 Sick leave
232
292 Long service leave
221
4,073 Total current portion
4,286
Non-current employee entitlements are represented by:
343 Long service leave
626
3,192 Retiring leave
3,753
3,535 Total non-current portion
4,379
7,608 Total employee entitlements
8,665
The present value of the retirement and long-service leave obligations depend on a number of factors that are
determined on an actuarial basis using a number of assumptions. Two key assumptions used in calculating this liability
include the discount rate and the salary inflation factor. Any changes in these assumptions will impact on the carrying
amount of the liability.
In determining the appropriate discount rate the Authority considered the interest rates on NZ government bonds which
have terms to maturity that match, as closely as possible, the estimated future cash flows. The salary inflation factor has
been determined after considering historical salary inflation patterns and after obtaining advice from an independent
actuary.
If the discount rate were to differ by 1% from the Authority’s estimates, with all other factors held constant, the
carrying amount of the liability would be an estimated $250,000 higher/$280,000 lower.
If the salary inflation factor were to differ by 1% from the Authority’s estimates, with all other factors held constant, the
carrying amount of the liability would be an estimated $267,000 higher/ 233,000 lower.
16 Taxpayers’ funds
Actual
2008
$000
Actual
2009
$000
General funds
- Balance at 1 July
42
1,296 Net surplus
505
4,780 Capital injections from the Crown
3,125
(2,458) Transfer to Ministry of Agriculture and Forestry upon establishment of Authority (non
cash)
-
(2,280) Establishment of Memorandum Accounts (non cash)
-
(1,296) Provision for repayment of surplus
(505)
42 General funds 30 June
3,167
42 Total taxpayers’ funds
3,167
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 51
17 Reconciliation of net surplus to cash flows from operating activities
Actual
2008
$000
Actual
2009
$000
1,296 Net Surplus
505
Add / (less) non-cash items
3,085 Depreciation and amortisation expense
3,166
514 Property, plant and equipment and intangible asset write-down
-
(10,753) Transfer to Ministry of Agriculture and Forestry
-
(2,280) Establishment of Memorandum Accounts
- (Gains) on movement of insurance liability
(9,434) Total non-cash items
104
3,270
Add / (less) items classified as investing or financing activities
(16) (Gains) on disposal of property, plant and equipment
(109)
(16) (Gains) on disposal of property, plant and equipment
(109)
Add / (less) movements in working capital items
(126) (Increase) / decrease in inventories
(5,907) (Increase) / decrease in accounts receivable
886
(60) (Increase) / decrease in prepayments
(154)
10,957 Increase / (decrease) in accounts payable
(435)
4,073 Increase / (decrease) in employee entitlements
195 Increase / decrease in other provisions
5,840 Increase / decrease in non-current liabilities
14,972 Working capital movements
6,818 Net cash flow from operating activities
1,057
38
(1,438)
(46)
3,620
18 Related parties
The Authority is a wholly owned entity of the Crown. The government significantly influences the roles of the Authority
as well as being a major source of revenue.
The Authority enters into transactions with other government departments, Crown agencies and state-owned
enterprises on an arm’s length basis. Those transactions that occur within a normal supplier or client relationship on
terms and conditions no more or less favourable than those which it is reasonable to expect the Authority would have
adopted if dealing with that entity at arm’s length in the same circumstance are not disclosed.
There are close family members of key management personnel employed elsewhere within the Authority. The terms
and conditions of those arrangements are no more favourable than the Authority would have adopted if there were no
relationship to key personnel.
No provision has been required, nor any expense recognised, for impairment of receivables from related parties.
Key management personnel compensation and related parties
Actual
2008
$000
Actual
2009
$000
2,071 Salaries and other short term benefits
2,386
- Post-employment benefits
- Other long-term benefits
- Termination benefits
2,071 Total key management personnel compensation
99
2,485
Key management personnel include the Chief Executive and the nine members of the Senior Management Team. There
are no relevant related party transactions.
PAGE 52
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
19 Financial instrument risks
The Authority’s activities expose it to a variety of financial instrument risks, including market risk, credit risk and liquidity
risk. The Authority has a 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.
Market risk
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign exchange rates.
The Authority purchases goods and services internationally and is exposed to currency risk arising from various currency
exposures, primarily with respect to the US dollar, the Australian dollar and the Euro. Currency risk arises from future
purchases and recognised liabilities, which are denominated in a foreign currency.
The Authority’s foreign exchange management policy requires the Authority to manage currency risk arising from
future transactions and recognised liabilities by entering into foreign exchange forward contracts to hedge the entire
foreign currency risk exposure. The Authority’s policy has been approved by the Treasury and is in accordance with the
requirements of the Treasury Guidelines for the Management of Crown and Departmental Foreign-Exchange Exposure.
Interest rate risk
Interest rate risk is the risk that the fair value of a financial instrument will fluctuate or, the cash flows from a financial
instrument will fluctuate, due to changes in market interest rates.
The Authority has no interest bearing financial instruments and, accordingly, has no exposure to interest rate risk.
Credit risk
Credit risk is the risk that a third party will default on its obligation to the Authority, causing the Authority to incur a
loss. In the normal course of its business, credit risk arises from debtors, deposits with banks and derivative financial
instrument assets.
The Authority is only permitted to deposit funds with Westpac, a registered bank. For its other financial instruments,
the Authority does not have significant concentrations of credit risk.
Westpac is part of the Crown Retail Deposit Guarantee Scheme and so deposits with Westpac are guaranteed by the
Crown up to a total of $1 million held.
The Authority’s maximum credit exposure for each class of financial instrument is represented by the total carrying
amount of cash and cash equivalents, net debtors (note 7), and derivative financial instrument assets.
There is no collateral held as security against these financial instruments, including those instruments that are overdue
or impaired. A sensitivity analysis for derivative financial instruments is required when the gross aggregated fair value of
derivatives are significant.
Liquidity risk
Liquidity risk is the risk that the Authority will encounter difficulty raising liquid funds to meet commitments as they
fall due.
In meeting its liquidity requirements, the Authority closely monitors its forecast cash requirements with expected cash
drawdown’s from the New Zealand Debt Management Office. The Authority maintains a target level of available cash to
meet liquidity requirements. The table below analyses the Authoritys financial liabilities that will be settled based on the
remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed are the contractual
undiscounted cash flows.
Less than 6
months
$000
Creditors and other Payables (note 11)
7,011
Between 6
months and Between 1 and
1 year
5 years
$000
$000
-
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Over 5 years
$000
-
PAGE 53
-
20 Categories of financial instruments
The carrying amounts of financial assets and financial liabilities in each of NZ IAS 39 categories are as follows:
Actual
2008
$000
Actual
2009
$000
Loans and receivables
8,869 Cash and cash equivalents
12,792
5,907 Debtors and other receivables
5,021
14,776 Total loans and receivables
17,813
Financial liabilities measured at amortised cost
7,594 Creditors and other payables (note 11)
7,011
21 Capital management
The Authority’s capital is its equity (or taxpayers’ funds), which comprises general funds and revaluation reserves. Equity
is represented by net assets.
The Authority manages its revenues, expenses, assets, liabilities, and general financial dealings prudently. The
Authority’s equity is largely managed as a by-product of managing income, expenses, assets liabilities, and compliance
with the Government Budget processes and with Treasury Instructions.
The objective of managing the Authority’s equity is to ensure the Authority effectively achieves its goals and objectives
for which it has been established, whilst remaining a going concern.
22 Memorandum accounts
The Authority operates cost recovery in three main activities. In accordance with Treasury Instructions the Authority
obtained authority from Joint Ministers to establish three Memorandum Accounts to account for the fluctuations
in matching the cost and revenue flows that will be experienced in setting the recovery rate from time to time. The
following sets out the movements recorded in the Memorandum Accounts for the year.
Verification of the food regulatory programme
Actual
2008
$000
Actual
2009
$000
(5,151) Balance as at 1 July
(6,919)
36,195 Revenue
37,499
(37,963) Expenses
(39,334)
(6,919) Balance as at 30 June
(8,754)
A new increased charge rate was established for the 08/09 financial year that is designed to recover the deficit in future
years.
Approvals, accreditations and registrations
Actual
2008
$000
Actual
2009
$000
177 Balance as at 1 July
279
4,153 Revenue
4,389
(4,051) Expenses
(3,904)
279 Balance as at 30 June
764
On review, the deficit and composition of the Approvals, Accreditations and Registrations memorandum account
revenue and expenses for non relevant activities were found. They have now been removed in the 2009 actuals.
Consequently the comparative figures for 2008 have been adjusted to reflect an accurate comparison for the 2008 to
2009 years.
PAGE 54
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Standards setting for the food industry
Actual
2008
$000
Actual
2009
$000
3,056 Balance as at 1 July
3,282
17,241 Revenue
16,903
(17,015) Expenses
(16,799)
3,282 Balance as at 30 June
3,386
It is expected that the surplus for this activity will reduce in the 2009/10 financial year as there is expected to be an
increase in costs associated with the operation of this activity which will not be recovered through increased fees or
charges.
23 Major budget variances
The following explanation of significant movements between the Main Estimates and the actual results for 2008/09 are
explained below.
Statement of financial performance
There are no major budget variances between Main Estimates and actual results for Total Income and Total Operating
Expenditure.
Statement of financial position
Employee Entitlements have increased significantly as a result of the reduction in interest rates and their impact on the
discount rates with the resulting increase in future entitlements.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 55
Non-Departmental Statements and Schedules
The following non-departmental statements and schedules record the expenses, capital receipts, and assets the Authority
manages on behalf of the Crown. As these assets are neither controlled by the Authority nor used in the production of the
Authority’s outputs, they are not recorded in the Authority’s financial statements.
The Authority administered $1.901million of expenses, $2.101 million of capital receipts, including $0.155 million of assets
for the year ending 30 June 2009. Further details of the Authority’s management of these Crown assets is provided in the
Output Performance sections of this report.
The financial information reported in these statements and schedules is consolidated into the Crown financial statements,
and therefore readers of these statements and schedules should also refer to the Crown financial statements for the year
ended 30 June 2009.
Schedule of Non-Departmental Expenditure Against Appropriations
For the year ended 30 June 2009
Expenditure
Expenditure
before
after
Remeasurement Remeasurements Remeasurements
2009
2009
2009
$000
$000
$000
Appropriation
Voted
2009
$000
Vote
Other Expenses to be incurred by the Crown
New Zealand and Australia Joint Food Standards Setting Treaty
1,901
-
1,901
1,901
Total appropriations for other expenses
to be incurred by the Crown
1,901
-
1,901
1,901
Total Vote Food Safety
1,901
-
1,901
1,901
The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position
and results for the period, reference should be made to the consolidated Financial Statements of the Government for the
year ended 30 June 2009.
Statement of Non-Departmental Unappropriated Expenditure and Capital Expenditure
For the year ended 30 June 2009
There has been no unappropriated expenditure for the year ended 30 June 2009.
Schedule of Non-Departmental Receipts
For the year ended 30 June 2009
Actual
2009
$000
Main Estimates
2009
$000
Supplementary
Estimates
2009
$000
New Zealand and Australia Joint Food Standards Setting Treaty
1,901
1,744
2,138
Total non-departmental capital receipts
1,901
1,744
2,138
Capital receipts
The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and results for the
period, reference should be made to the consolidated Financial Statements of the Government for the year ended 30 June 2009.
PAGE 56
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Schedule of Non-Departmental Expenses
For the year ended 30 June 2009
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
1,901
1,577
1,901
45
197
237
1,946
1,774
2,138
Actual
2009
$000
Main
Estimates
2009
$000
Supplementary
Estimates
2009
$000
Cash and cash equivalents
155
-
200
Total current assets
155
-
200
Expenditure
Grants
GST input expenses
Total non-departmental expenditure
Schedule of Non-Departmental Assets
For the year ended 30 June 2009
Current assets
Schedule of Non-Departmental Contingent Liabilities and Contingent Assets
As at 30 June 2009
Unquantified contingent liabilities
The Authority on behalf of the Crown has no unquantifiable contingent liabilities.
Quantifiable contingent liabilities
The Authority on behalf of the Crown has no unquantifiable contingent liabilities.
Contingent assets
The Authority on behalf of the Crown has no contingent assets.
Schedule of Non-Departmental Commitments
As at 30 June 2009
The Authority on behalf of the Crown has no commitments.
The accompanying notes form part of these financial statements. For a full understanding of the Crown’s financial position and results for the
period, reference should be made to the consolidated Financial Statements of the Government for the year ended 30 June 2009.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 57
Notes to the Non-Departmental Financial Statements
For the year ended 30 June 2009
1
Statement of Accounting Policies
Reporting entity
These non-departmental schedules and statements present financial information on public funds managed by the
Authority on behalf of the Crown.
These non-departmental balances are consolidated into the Financial Statements of the Government. For a full
understanding of the Crown’s financial position, results of operations and cash flows for the year, reference should also
be made to the Financial Statements of the Government.
Accounting policies
The non-departmental schedules and statements have been prepared in accordance with the Government’s accounting
policies as set out in the Financial Statements of the Government, and in accordance with relevant Treasury Instructions
and Treasury Circulars.
Measurement and recognition rules applied in the preparation of these non-departmental schedules and statements are
consistent with New Zealand generally accepted accounting practice as appropriate for public benefit entities.
The accounting policies set out below have been applied consistently to the period presented in these financial
Statements.
The following particular accounting policies have been applied:
Budget figures
The budget figures are those included in the Authority’s Statement of Intent for the year ended 30 June 2009, which are
consistent with the financial information in the Main Estimates. In addition, these financial statements also present the
updated budget information from the Supplementary Estimates.
Goods and services tax
All items in the financial statements, including appropriation statements, are stated exclusive of GST, except for
receivables and payables, which are stated on a GST inclusive basis. An input tax deduction is not claimed on nondepartmental expenditure. Instead, the amount of GST applicable to non-departmental expenditure is recognised as a
separate expense and eliminated against GST revenue on consolidation of the government financial statements.
2
Major budget variances
There are no major budget variances between the Authority’s non-departmental estimated figures in the Main Estimates
and the actual results.
PAGE 58
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
Audit Report
To the readers of New Zealand Food Safety Authority’s financial statements and statement of service
performance for the year ended 30 June 2009
The Auditor‑General is the auditor of New Zealand Food Safety Authority (the Authority). The Auditor‑General
has appointed me, Clare Helm, using the staff and resources of Audit New Zealand, to carry out the audit. The
audit covers the financial statements and statement of service performance included in the annual report of the
Authority for the year ended 30 June 2009.
Unqualified Opinion
In our opinion:
• The financial statements of the Authority on pages 36 to 55:
- comply with generally accepted accounting practice in New Zealand; and
- fairly reflect:
-1 the Authority’s financial position as at 30 June 2009;
-1 the results of its operations and cash flows for the year ended on that date;
- its expenses and capital expenditure incurred against each appropriation administered by the Authority
and each class of outputs included in each output expense appropriation for the year ended 30 June
2009; and
-1 its unappropriated expenses and capital expenditure for the year ended 30 June 2009.
• The schedules of non-departmental activities on pages 56 to 58 fairly reflect the assets, liabilities, revenues,
expenses, contingencies and commitments managed by the Authority on behalf of the Crown for the year
ended 30 June 2009.
• The statement of service performance of the Authority on pages 29 to 35:
- 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 included 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 included in the statement of forecast service performance adopted at the start of the
financial year.
The audit was completed on 17 September 2009, and 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 Chief Executive and
the Auditor, and explain our independence.
Basis of Opinion
We carried out the audit in accordance with the Auditor‑General’s Auditing Standards, which incorporate the
New Zealand Auditing Standards.
We planned and performed the audit to obtain all the information and explanations we considered necessary in
order to obtain reasonable assurance that the financial statements and statement of service performance did not
have material misstatements, whether caused by fraud or error.
Material misstatements are differences or omissions of amounts and disclosures that would affect a reader’s
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.
The audit involved performing procedures to test the information presented in the financial statements and
statement of service performance. We assessed the results of those procedures in forming our opinion.
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
PAGE 59
Audit procedures generally include:
• determining whether significant financial and management controls are working and can be relied on to
produce complete and accurate data;
• verifying samples of transactions and account balances;
• performing analyses to identify anomalies in the reported data;
• reviewing significant estimates and judgements made by the Chief Executive;
• confirming year-end balances;
• determining whether accounting policies are appropriate and consistently applied; and
• determining whether all financial statement and statement of service performance disclosures are adequate.
We did not examine every transaction, nor do we guarantee complete accuracy of the financial statements and
statement of service performance.
We evaluated the overall adequacy of the presentation of information in the financial statements and statement
of service performance. We obtained all the information and explanations we required to support our opinion
above.
Responsibilities of the Chief Executive and the Auditor
The Chief Executive is responsible for preparing the financial statements and statement of service performance
in accordance with generally accepted accounting practice in New Zealand. The financial statements must fairly
reflect the financial position of the Authority as at 30 June 2009 and the results of its operations and cash flows
for the year ended on that date.
The financial statements must also fairly reflect the expenses and capital expenditure incurred against each
appropriation administered by the Authority and each class of outputs included in each output expense
appropriation for the year ended 30 June 2009. The financial statements must also fairly reflect the Authority’s
unappropriated expenses and capital expenditure for the year ended on that date.
In addition, the Chief Executive is responsible for preparing schedules of non-departmental activities, in
accordance with the Treasury Instructions 2008 that must fairly reflect the assets, liabilities, revenues, expenses,
contingencies and commitments managed by the Authority on behalf of the Crown for the year ended 30 June
2009.
The statement of service performance must fairly reflect, for each class of outputs, the Authority’s standards
of delivery performance achieved and revenue earned and expenses incurred, as compared with the forecast
standards, revenue and expenses adopted at the start of the financial year.
The Chief Executive’s responsibilities arise from sections 45A and 45B of the Public Finance Act 1989.
We are responsible for expressing an independent opinion on the financial statements and statement of service
performance and reporting that opinion to you. This responsibility arises from section 15 of the Public Audit Act
2001 and section 45D(2) of 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 Institute of Chartered Accountants of New Zealand.
Other than the audit, we have no relationship with or interests in the Authority.
Clare Helm
Audit New Zealand
On behalf of the Auditor‑General
Wellington, New Zealand
PAGE 60
NEW ZEALAND FOOD SAFETY AUTHORITY ANNUAL REPORT 2008/2009
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New Zealand Food Safety Authority
86 Jervois Quay
PO Box 2835, Wellington
New Zealand
Telephone 04 894 2500
Facsimile 04 894 2501
Food Safety Concerns
0800 NZFSA1 (0800 693 721)
www.nzfsa.govt.nz
ISSN 1173-6976 (Print)
ISSN 1173-7026 (Online)
October 2009