MBIE told to look at financial processes after 'unexplained variance' in immigration revenue

Audit New Zealand warned the Ministry of Business, Innovation and Employment (MBIE) to look at its financial processes and controls after finding 'unexplained variance' in its immigration revenue.

"This meant that the Ministry was unable to confirm that immigration revenue of $422.5m (departmental and non-departmental) was complete," said Audit NZ's report.

"The Ministry, subsequently at our request, performed a reconciliation of the various immigration systems to the financial records but there was an unexplained variance. This required us to revisit our audit approach during the audit and required additional effort to complete the work within the statutory deadline."

After responding to the audit, MBIE was left with a $2.5 million (1.6 per cent) difference for non-departmental for Crown revenue and $1.1m (0.4 per cent) for department revenue in the 2023/24 year, officials said in a 'no-surprises' briefing to immigration minister Erica Stanford.

Audit NZ asked MBIE to take steps to ensure its systems were robust to "address risks of material misstatement". It stated that the ministry had multiple immigration systems that did not provide reports that were easily reconciled to financial records or MBIE's annual report.

The agency recommended that MBIE reviewed its immigration revenue processes, systems, and controls.

MBIE chief financial officer Sharyn Mitchell said being asked to provide more supporting documentation for an audit query was not an unusual request.

"In 2024 and before, the reconciliation was a high-level check. It used extracted data from various systems and was intended as a general sense check, rather than a detailed analysis from source systems to the general ledger.

"Through the conclusion of the 2024 audit and onwards from 2025, a more robust process was introduced with quarterly reconciliations being completed across all systems, the general ledger and the INZ bank account. In 2025 following these changes to the reconciliation process, the variance was reduced to a combined total of 0.03% or $0.2 million."

The differences arose from a range of factors such as changes in foreign exchange rates between the transaction and reconciliation occurring, she said.