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Auditor-General's overview

Public entities in the social sector: Our audit work.

This is the first time my Office has published a report focused on public entities in the social sector. I want to draw attention to the work my Office does, outline why we are interested in changes in the social sector, and share our thoughts on where we might focus our effort in the future.

How entities deliver social services and implement government policy directly affects the lives of a large number of New Zealanders. In September 2013, more than 300,000 New Zealanders received a benefit. In the year to June 2012, 228,000 children depended on benefit recipients. About 200,000 people live in Housing New Zealand properties. About 600,000 older people receive New Zealand Superannuation, and many rely on it for their daily livelihood.

Collectively, whether we can give our children a secure upbringing that gives them what they need will have an obvious bearing on New Zealand's future. The Government has been clear that it wants public entities to change how they work together to progress work on vulnerable children.

I am also aware of the importance of access to housing and housing affordability. The provision of social housing is closely linked to other social services for those most in need of support.

How well social sector entities are run will, in part, determine how effective government spending is. Investment in the social sector is significant. It accounts for more than a quarter of total Crown funding. This does not include spending on education and health.

This report describes the operating environment for social sector entities, including the Government's priorities that these entities are expected to work towards, the amount and flow of funding, and important changes in the sector. My role as Auditor-General is not to comment on policy but to provide assurance to Parliament and the public. This includes assessing whether entities implement the Government's directions and whether they use public funding in an effective and efficient way to ensure that New Zealanders receive public services of high quality.

I am pleased to highlight the results of the annual audits of the six entities this report covers. As part of our audit work, we make recommendations for improvement that we communicate to entities through management letters. Very few issues were significant enough to warrant mention in this report.

It is important that entities have the right systems and controls to look after public resources and deliver services. We have assessed the financial and management control environments of the entities covered by this report as "good" or "very good". This does not provide absolute assurance about those controls but indicates that entities generally have appropriate controls to manage risk. This is important for entities responsible for managing significant public resources and implementing a huge programme of change.

The social sector is undergoing significant change and faces both old and new challenges, whether related to welfare reform, support for children, or social housing. Pressure to deliver services in more efficient and innovative ways and to find savings is leading to changes in how entities provide support to New Zealanders. These changes will challenge entities and their systems and processes.

We are interested in how change is implemented and how entities manage the risks associated with new responsibilities, processes, and ways of working. Therefore, we will continue to look at the main areas of change in our 2013/14 annual audits of social sector entities.

This report's focus on the social sector corresponds closely with the 2013/14 theme for my Office's work programme, which is service delivery. My Office is carrying out several performance audits that will specifically look at how well social sector entities support New Zealanders – in particular, those groups most in need or at risk.

Also, we are currently preparing our long-term work programme. The social sector will continue to feature prominently. Our work is designed not only to support Parliament in holding entities to account but also to help ensure that New Zealand enjoys a high-performing social sector. We will work with entities, especially those implementing significant changes, to make sure that our recommendations add value and help them improve their performance.

Signature - LP 

Lyn Provost
Controller and Auditor-General

4 December 2013

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Report details

CoverPublic entities in the social sector: Our audit work

ISBN 978-0-478-41054-9 (print)
ISBN 978-0-478-41055-6 (online)