Some serious questions for MUNZ to answer

Attached is the RE-Filed accounts for 2009 – so far MUNZ has lodged up to 2009 (still a few more years to go) as ordered by the Registrar.

However there is a very interesting read in the 2008 comparative.

Firstly MUNZ never filed their orginial 2008 accounts. However with the whole combined accounts now you can see why. In the 2008 income comparative there is a $200k transfer from the welfare fund just below the proceeds from the sale of property.

Since this is now consolidated accounts the question are:

Which Branch took the welfare fund and pocketed it into their branch fund?

Did they use it to hide big branch losses?

Did the members know their funds were flogged?

Note 5 and 6 shows big amounts owing to IRD as well – did they use the Welfare Funds to pay off the IRD?


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  • Dave

    its times like this you wish you had all their members email / postal addresses and gather all the info and send it to them. Seriously, Hotchin still has his assets siezed, and nothing has been proven, when will the IRD and Register get serious with these corrupt idiots.

    One would almost think they had Matt M and Unite Services doing their bookkeeping! Or, was the transfer to go to an election fund, you know, cash in a brown paper bag.

    • Economist

      Duh. But these days we use internet banking

      • Dave


        1) By “We use internet banking” do you mean we MUNZ munters, or the LIebour party or both.

        2) Are you an official or employed by MUNZ or/and a labour party official/member.

        Burn baby burn.

  • DavidW

    Curious that the “welfare fund” is not shown anywhere as an asset and there were no other transfers to or from this fund. Presumably as the “welfare fund” was able to legitimately transfer cash into the general pot of the union, it is not restricted by Deed of Trust or any other limiting arrangement, it must form a legitimate part of the Union’s funds structure. The balance sheet therefore would appear to be incomplete.

    Also interesting that they dipped into this “welfare Fund” to a level that provided the activities to show a surplus of almost the same amount for the year of 2008. But then the auditors would appear to be small town so expecting clarity might be asking a lot.

    • owl

      Transfer of the welfare fund should ring alarm bells all over the place. Firstly which branch had the fund? secondly nowhere in the accounts does it show on the balance sheet which means it went straight into a general slush fund. The auditors have seriously got this wrong and the notes of the accounts need further clarification.

      Imagine if Air NZ put out a set of accounts saying “oh by the way the way we moved $1M of the staff super funds into the profit and loss”

      • Economist

        Isn’t welfare fund a political hit fund? Spent only in election years? Surprised they mentioned it at all…

      • In Vino Veritas

        Owl, if the welfare fund transfer had come from another branch, and MUNZ was now accounting for its branches, surely this balance would consolidate out net net. They therefore have to have some off balance sheet fund, ostensibly outside the auspices of MUNZ. And given the small amount that appears to have been expenses as “dontations”, I wonder what this “welfare fund” actually funds? How did the “welfare fund” get funded in the first place? What is it’s purpose?

        • owl

          Agree on all those points and questions. I am trying to work it out. They have the seafarers trust fund and the MUNZ trust which the notes say they don’t have to accounts for and publish. I disagree

          • Time For Accountability

            Under The NZAEMPU rules the union must prepare audited accounts.

            I quote from the Incorporated Socities Web Site.

            * If the financial statements have been audited, include the auditors report in the same document as the financial statement
            The financial statements must have been presented to, and approved by, the members of the society at a general meeting before they can be submitted

            Thus the registrar of incorporated Societies has no alternative than request them to publish their full accounts not the simple extract.

            There is an interesting aspect that although the Financial Reporting Act 1993 does not apply to incorporated Societies, the fact an auditor is appointed that is a NZICA member then that auditor must insure compliance with the accounting and audit standards of the institute. It is essentially similar.

            This is about accountability to members and the public (Because it is an incorporated Society).

            If i was their auditors i would be very worried they publish accounts with the auditors name but no indication of the audit.

            There is a shortcoming in the incorporated Society requirements to

            The 2006 accounts are not even signed.

            I suggest the registrar in relation to any non complying union has no alternative than to remove them from the register.

            He does so for other Societies that are non complying so the question arises why there is

  • In Vino Veritas

    It might also be pertinent to ask why a Union (Incorporated Society) continues to hold massive cash ($2.5m) and near cash balances ($8.7m) over long periods.

    • blokeintakapuna

      ..ESPECIALLY when these same entities owe IRD thousands. I wonder when Shearer will be demanding they “pay their fair share”

      • Pissedoffyouth

        I think Shearer could do a John key and shout “Show me the money!”

  • blokeintakapuna

    Is some Legal / Accounting person able to file a “formal complaint” with the Auditor General / SFO / Parliamentary Services or whoever about these renta-thugs?, so the respective authorities actually extract digit before being caught with pants around ankles?

  • Rat

    If you are bothered to read the 2008 accounts, there is a Consolidated Statement of Cashflows, this may help with most of your questions and explains the $1.6 million increase in cash balances between 2007 and 2008.

    • owl

      we have read them that’s how we found out that MUNZ and other Unions were hiding cash!!!! and not reporting – your comments relate to the newly issued UPDATED ACCOUNTS – why dont you start reading!

      • Dave

        is Rat short for union Rat……. Test tube Rat.

        Once again, I commend the owl for his work, I am amazed how much info he has gleaned from their public records, god knows what actually goes on behind those public records.

        • blokeintakapuna

          Independent, Parliamentary inquiry is needed, considering that the Labour Party are stuffed full of these renta-thugs funding one of NZ’s two main political parties.

          Surely the Governor General must feel very ill at ease with the rampant corruption the Labour Party have proven themselves so capable of again and again and again and now with these illegally operating unions sheltering / hiding Millions of dollars, avoiding IRD taxes – but still funding the Labour Party… whiffy whiffy whiffy…

          How much rampant corruption does the SFO / GG need demonstrated before launching a formal inquiry about political corruption with Labour and their funders?

          Or would it need Mallard, Shearer & Little to do an armed hold up of a bank before respective authorities extract digits?

          It’s not rocket science… smoke… fire…

          • Economist

            NO FUCKING INQUIRY when we can all recognize systemic corruption when we can see it.

            1. Ban and deregister all unions

            2.Ban and deregister all political parties who are union-affiliated or have a history of union-affiliation

            3. Ban and deregister all politicians who are union-affiliated or have a history of union-affiliation

            4. Ban permanently all voters who are union-affiliated or have a history of union-affiliation

          • Hazards001


        • Rat

          oh you big Keyboard warrior you

      • Rat

        I seriously doubt you have read them ,nor understand them if you have. At the same time the 2009 were uploaded, the 2008 Accounts were uploaded. The major difference was than in the 2008 accounts The Consolidated Statement of Cashflows was produced, not a requirement under GAAP with Differential Reporting, but produced nonetheless.

        Try not confuse the Comparatives, with the 2008 Accounts as far as notes to the Accounts go, Schoolboy error.

        There was none with the 2009 Accounts, except a reconciliation of Operating Cashflows.

        The Statement of Consolidated Cashflows is a report that describes the movements in Cash, The Operating Cashflow reflects the normal everyday running of the entity and the Investing and Financial movements reflecting more of the Balance Sheet.

        As the 2009 already contains the Operating Cashflow, then you should be able to work the rest of it out, give it a go. First year Accounting Students can do them in their sleep and understand what the concept is of the report.

        The 2008 Accounts, shows quite clearly where the money has gone, it isn’t rocket science, but will help answer the questions that Slater started off this topic with. As for hiding Cash ?, please explain where and how, in light of the 2008 Cashflow

        Not here to defend anyone, but more of a devils advocate.

        Feel free to email me if you want clarification, always happy to help.

        • owl

          You have challenged the owl. read this post in an hour rat.!

          • SJ00

            Owl vs Rat. Owls usually win. (similar to the Hawk vs Mouse video posted on WO)

        • owl

          Okay listen up Rat.
          First MUNZ failed to file their 2008 accounts in 2008. What you are reading is their new consolidated accounts. Owl 1 – o
          Second – once filed ( correct ones) a branch has transferred welfare funds to their general fund, so which branch? And why? Owl 2 – 0
          Third – who gives a dam about GAAP rules…members funds have been taken even worst “welfare” funds! Owl 6 – 0 MUNZ words not mine
          Fourth – really dislike people who say I am not here to defend anyone! Will you are and the length of your responses shows you have more than likely been instructed or working for someone Owl 10-0
          Fifth – that transfer is large and the auditors should of made a note to the account. Let me assume why they didn’t. Because they weren’t happy with MUNZ response and with 17k for each updated audit I would keep mum too. Love to hear their response. Plus they probably thought no one would look at it.
          Finally – the registrar nev Harris instructed MUNZ to file correct accounts not WO
          Final score 27 Rat 1 ( own goal)
          The owl always works for the members and apologizes wrong
          Why hasn’t helen Kelly stepped in here

          • Rat

            Oh breathe through your nose and keep your trousers on

            First point “First MUNZ failed to file their 2008 accounts in 2008. What you are reading is their new consolidated accounts”

            That is a legal issue and not an Accounting issue, schoolboy error, you are looking too much into to the form rather than the substance of”Which Branch took the welfare fund and pocketed it into their branch fund?” which is what the question is.

            Second Point- “once filed ( correct ones) a branch has transferred welfare funds to their general fund, so which branch?”

            as mentioned before, the 2008 Consolidated Statement of Cashflows, shows where the welfare fund has gone…you are being lazy

            Third Point “who gives a dam about GAAP rules…members funds have been taken even worst “welfare” funds!”

            Obviously you do, If GAAP isnt an issue, then you wouldn’t be making so much ignorant, ill-informed and quite ridiculous statements. GAAP is the basis of you which you have made such stupid financial opinions on, or else anyone could make up any shit….oh hang on , when is “The Truth ” out ?

            Fourth Point- Incorrect, I am an Accountant, and I feel it is quite sad that there are people who can’t read financial statements but yet feel they are qualified to, and are backed up by equally stupid people using the Halo effect.

            I have never been a member of any Union nor Political Party

            Fifth – “that transfer is large and the auditors should of made a note to the account. Let me assume why they didn’t. Because they weren’t happy with MUNZ response and with 17k for each updated audit I would keep mum too. Love to hear their response. Plus they probably thought no one would look at it.”

            They did you Muppet, it is clearly stated in the 2008 Consolidated Cash-Flows

            Your Last point, yet again you have failed to differentiate between legal obligations and accounting substance

            Seventh Point – Hilarious you are making up a score card based on your own ill informed and ignorant views, I did offer for you to email, but obviously the cleaners are in.

            Eighth Point – Enjoy the Kool Aid

          • owl

            You have answered my question twice in your statement. You clearly use the word legal. Yes MUNZ have a legal obligation. They failed to file correct accounts and the new accounts show that the public under the incorporated society act were denied their rights Of public scrutiny. I can’t see how you can argue against that.
            Also you keep saying that the cash-flow shows the welfare fund transfer. Correct anyone can read that..but the cash-flow does not shows it was applied to a welfare payment just entered into the general fund.
            If MUNZ complied with the Act then none of this would be an issue.
            The Finance companies who failed apparently complied with all the GaAP and FRS rules didn’t they?
            Substance is everything…transfer from welfare fund..fine…where was it spent…the cash-flow clearly shows it was not spent on welfare for the members!

          • In Vino Veritas

            Unfortunately rat, you write a lot and say nothing. The 2008 consolidated cash flow shows the Welfare Fund monies coming in, but not going out “for the welfare” of members. All payments out went to employees, suppliers, tax, fixed assets, investments etc. As a distribution to members is none of these things, we can safely say that the money was spent on one of these items, otherwise the Auditor would have had it itemised. Since you appear to be an expert on these matters, explain why a Union needs to keep so much cash or near cash?

        • Time For Accountability

          Regarding Hiding Cash in various Union Accounts.
          There can be no doubt.

          There is no separate legal status of each branch otherwise each branch would be an incorporated Society.

          Thus all cash in the so called head office and branch accounts belongs to the one entity, the one and only Union.

          The fact that this was not accounted for in the various original union accounts is a significant suppression of cash.

          That is a major fail on the part of union management responsible for the preparation of the accounts.

          It is also a fatal fail on the part of the auditors such as they should resign and certainly should not have prepared amended accounts without explanation of the differences.

          It is also a fail by NZICA on the part of their practice review system.

          It also raises questions of membership whereby a member may think they belong to a branch but in reality they are a member of the incorporated Society as a whole.

          If i was a member paying different subscriptions than another branch i would be asking serious questions.

          If a welfare fund amount was paid back to the main union without authority of the welfare fund members it would be theft of the welfare fund account.

          If the funds were paid into the union for a specific purpose they would be held on trust and accounted for separately. The auditors should have ensured this reporting but there is no means of a member knowing what the welfare funds were used for if at all. Normally such funds on trust would be held in a special account from which welfare expenditure would be paid from.

          This is highly dodgy and could amount to money laundering. Especially if used for a a non welfare purpose such as a political donation.

          • Rat

            Money laundering…wow….Call the Cops

          • owl

            Thank you. This is such a no brainer. Transfer from welfare fund means it should be spent on welfare

  • AnonWgtn

    No good sending theaccounts to the MUNZ members.
    A.they cannot read and
    B.if they could they would not have clue as to what they are reading and what it meant.

  • disqus_Fe0nR5w1c6

    The audit report has been signed by a limited liability company….

    • Rat

      Call the Cops, the SFO…, any Audit Firms that arent Limited Liability Companies ? I only know of one

      • Time For Accountability

        Regarding Audit Reports

        Many audit reports have been signed by partnerships, including top tier accounting firms.

        at the end of the day if an audit is done by a firm of Chartered
        Accountants, either as a company or a partnership, ultimately it is done
        by a member holding a public practice certificate because that can only
        ever be held by an individual person.

        I believe the practice
        allowed by NZICA of signing in a partnership or company name is improper
        and a deliberate attempt by NZICA to skew their complaints process
        because a complaint must be about a member. Thus if there is no known
        member then it frustrates the complaint process.

        At best the company or partnership structures are a billing and profit sharing mechanism not a responsibility centre.

        • Rat

          show me one

          • Callum

            A statutory audit that requires a natural person to sign off ( any company for example) is done through the partnership, most other audits will be signed off under a company structure. We do it all the time, anything that can be signed off by a company is and the rest are done through the partnership.

          • Time For Accountability

            I would be interested how you relate that view to the rules starting with

            It is acceptable to trade as a company but I have been told by reviewers that only an individual can hold a certificate of public practice. A company cannot satisfy the prerequisites.

            Reviews are conducted on members holding a cpp.

        • Callum

          A company CAN be an NZICA member, the public practice certificate is issued as such and they are reviewed as such. Have all the same requirements as an individual or partnership in order to continue to offer accounting services to the public as a chartered accountancy firm. The public are no worse off as I can guarantee anyone trading as an individual or partnership uses trust structures to minimise personal risk.

          • Time For Accountability

            It is really good to have a Chartered Accountant commenting.
            This is probably semantics but:

            I have read the rules on the NZICA site and cannot see that a company can be a member. There are none listed in the NZICA membership list.

            A member of the NZICA CA college may hold a certificate of public practice which is required if a CA offers accounting services to the public over a certain dollar threshold. Thus a public practice member must be an individual person.

            NZICA does however allow members to trade withing a company structure but ultimately the member holds the PP certificate.

            That raises the question of if a company can be an auditor. I suggest they cannot despite widespread practice. The reason I say that is that if a company is not an NZICA member it cannot be an auditor. Secondly a company cannot satisfy the requirements NZICA require of an auditor that relate to an individual.

            I advance a similar argument regarding Audits purported to be done by a partnership other than i acknowledge that doing so may mean all partners holding PP certificates are essentially the auditors. But that would breach the rules because many partners would have no involvement.

          • Callum

            This won’t cover absolutely everything and I haven’t dug out specifics –

            Only certain audits are actually legally required (some companies, issuers etc), most others are either required by funding providers or by the constitution or trust deed of the entity. For many audits no NZICA membership is required.

            NZICA in effect controls the ability to complete some audits that require a chartered accountant to do them as they oversee chartered status in NZ. They regulate who is able to offering accounting services to the public as a chartered accountant, anyone can call themselves an accountant or auditor with a suitable qualification but cannot claim chartered status without NZICA approval.

            Previously you had to trade as a partnership or individual with your certificate of public practice and from memory ALL partners had to hold a CPP. That changed around 1996 (I think, maybe a bit later), company structures can be used but require the majority of shareholders to hold a CPP.

            The regulations set by NZICA permit a member to trade under any structure they may choose, including a company (must be approved by NZICA). All owners involved are responsible for ensuring the practice entity complies with NZICA’s requirements.

            Practice review is actually carried out on the practice entity, not the individual. Issues in the practice are the responsibility of all the principals and not just the CPP holder who directly oversaw that matter.

  • MarcWills

    I can’t believe Russell or Jacinta haven’t called for an inquiry – their threshold seems to be pretty low when they release press statements regarding all other less important matters.

    • Time For Accountability

      Russel with one l please. Otherwise it is an insult to the proper Russell’s with two l’s.

  • Time For Accountability

    Auditors Something is odd or dodgy about the audit. I believe the auditors an in breach of several matters.

    1. Auditing as a company when i argue is a post below that is improper.

    2. The Union Equity in the original accounts was $2,370,147 whereas the revised accounts show $13,838,730 That is a deliberate suppression of $11.4m. That out to be a worry to members, NZICA, It is a huge discrepancy. The executive are responsible for that and i argue must resign forthwith.

    3. The original accounts have clear notes about the associated entities:The MUNZ Trust and The Seafarers Fighting Fund Trust. Both have balance sheet amounts and cash flow amounts. The revised accounts have no notes about these associated entities. The Munz Trust balance sheet amounts remain in the revised accounts but the Seafarers Fighting Fund Trust amounts disappear from the Balance Sheet and the Cash Flow.

    4. The auditors have no independence because they prepare Financial Statements for both associated entities and are fee dependent. That is a clear breach of the ethics.

    5. When revised financial Statements are prepared and resubmitted to the Audit the auditors are supposed to explain the reasons for the difference. They do not and theat is a clear breach of the ethics.

    6. The maintain the revised accounts as “Consolidated” There is no consolidation as there is only one entity. That is a fail by the auditors.

    7. It is the auditors task to ensure the Union present accounts in compliance with accounting standards. They did not hence the $11.4m discrepancy. They had no alternative than to resign and again may have breached the ethics.

    8. Given that the Union Fees and associated expenses are not taxed something needs to be explained as it appears the rent and investment income are subsidizing a pure union loss. Why.

    9. Point 8 leads on to the point of responsibility centre accounting. It is impossible for a member to understand the profit or loss in the three main areas: Union activity, Rental Activities and Investing Activities. The original accounts attempted to do that but the revised accounts do not.

    10. Ultimately a member has a stake in the equity. If a member withdrew only thinking he was entitled to his share of the branch on a winding up but really may have been entitled to his share of an additional $11.4m then that member would be entitled to be upset. Say, for example, one particular branch was cash rich and others were not. Then how would a member of the cash rich branch feel if he thought others were entitled to his share of the cash and vice versa how does the other members now feel knowing they may be entitled to more of the cake.

    11. What is the ultimate disposition of the $13.8m equity?

    12. Where is the note if any employee received more than $100k as required by the accounting standards. There are several other omissions as well. I argue the accounts need to be resubmitted after they have been re-audited by someone who is not fee independent and does comply with all accounting standards.

    • Callum

      I’ll try to answer these.

      1. As above, using a company as a practice entity is perfectly legitimate.

      2. The executive would argue they believed their reasoning for originally excluding the branches was reasonable and there was no intent to deceive since the accounts stated branches were excluded. I presume none were accountants so may be hard to argue they should have known better, based on the new accounts all branches were separately audited and would have supplied branch accounts to members so nothing was hidden from them.

      3. It looks like the Seafarers Fighting Fund Trust has been consolidated in the new accounts but the MUNZ Trust has not but very hard to tell what has actually happened. Hard to comment on without the Trust Deed, however there should at least be related party disclosure for the MUNZ Trust especially as they are noted in the audit report as associated entities.

      4. I doubt a 6 director firm could be considered fee dependent based on $20k of audit fees, independence issues with the two related entities could well be appropriately managed and would depend on the exact nature of the work done and safeguards put in place. Looks a bit untidy though if the Seafarers Fighting Fund Trust has actually been consolidated now.

      5. There is not a requirement to explain the difference between the old and new accounts but the previous opinion should have been withdrawn along with the incorrect financial statements.

      6. I don’t believe it is misleading to describe the accounts as consolidated given the branches are operated separately and the structure of the entity is clearly disclosed. However the statements are inconsistently labelled with the word consolidated missed from the Statements of Comprehensive Income and Changes in Equity.

      7. Would need to be considered in light of the impact of the error. Note the original accounts clearly disclosed what was and wasn’t included and why, branches were separately audited and members were provided with the appropriate information. Might be hard to argue it was more than a technical oversight and that any member was disadvantaged in any way, unlikely to be significant consequences.

      8. Many organisations build up cash reserves and other income generating assets (or may be gifted them) in order to provide future income to support their objectives and it would be hard to argue against the financial prudence of doing so. With a good asset basis it is perfectly acceptable to reduce current member fees to allow for income from other sources.

      9. There is no requirement to report to that level of detail and given the answer above it could actually make the accounts a little mis-leading.

      10. An irrelevant point unless there is an intent to wind up, if a wind up was intended it is likely to make any distribution on a basis that takes account of both individual branch wealth and the more important factor of length of membership. Generally you don’t join a union so you can close it down and split up the assets.

      11. Most likely if there were intentions to wind up then much of the reserves would be absorbed through fee reductions for member. Any balance left would be distributed on a basis agreed by members, reflecting length of membership etc.

      12. That is a Companies Act requirement, not required for an incorporated society reporting under differential reporting. Haven’t looked in detail for other missing disclosures but as a small entity there are not that many items required to be disclosed.