Part 2: Our multi-year work programme

Draft annual plan 2019/20.

The ultimate outcome that we seek from our work is that Parliament and New Zealanders can have trust and confidence in the public sector. To contribute to that outcome, we aim to achieve the following impacts:

  • Parliament provides effective scrutiny of the public sector;
  • New Zealanders are better informed about the performance and accountability of the public sector; and
  • The public sector improves its performance and accountability.

In addition to ongoing improvements to our core work, we are deliberately focusing on two strategic priorities – sharing good practice and influencing improved performance and accountability. Some of the work we have planned for 2019/20 is directly related to these priorities. For every other piece of work in our programme, as well as seeking to improve performance, we will be looking for good practice to share with other public organisations and looking to encourage more effective accountability arrangements.

Appendix 2 provides a summary of the work we plan to complete in 2019/20 in the context of a multi-year overview of our work. In this Appendix, the work is grouped in categories, which we describe below.

1. Theme-based work

Applying a theme across aspects of our work enables us to increase the impact of our work, and to more effectively use our unique role to influence improvements in public sector performance and accountability.

In any given year, our theme-based work includes both work that we are completing from previous years’ themes and work that we are starting under an existing or a new theme. In 2019/20, we plan to:

  • complete a report about our Water management theme;
  • complete work from the first year of our three-year Procurement work programme;
  • start the second year of work on our three-year Procurement work programme; and
  • start work on our Improving the lives of New Zealanders theme.

In Part 3, we explain more about our Procurement theme. We also outline our Improving the lives of New Zealanders theme and the work we plan to carry out. We are still exploring and scoping work under the latter theme. We expect that future themes will emerge from our work during 2019/20.

2. Issues of ongoing interest

Alongside our theme-based work, we carry out work on issues that we consider warrant scrutiny, or where we are required to carry out ongoing work. In 2019/20, we intend to carry out work on:

  • Ethics and integrity landscape
    Through our work, we have observed examples where public entities have not had the right culture, leadership, or systems in place to ensure the high levels of integrity and ethical behaviour that Parliament and the public would expect. There have also been a number of high-profile instances of fraud in the public sector. Unethical behaviour, dishonesty, and corruption erode New Zealanders’ trust and confidence in our public sector, and can affect New Zealand’s international reputation. We therefore consider that public sector ethics and integrity is a critical issue for us to focus on now and in future years.

    We plan to carry out work to better understand and describe the public sector ethics and integrity landscape, examining what expectations, advice, and support are available to public entities to ensure that they put in place an appropriate ethical culture, and controls for preventing and detecting wrongdoing.

    It is likely that this work will involve greater collaboration with other integrity agencies – for example, the Serious Fraud Office, and the State Services Commission.
  • Risk management in local government
    Historically, reviews have found that some councils have weak risk-management practices. Through our audit work, we have also identified that there is room for councils to improve their day-to-day management of risks.

    Starting in 2019/20, we intend to delve deeper into how councils approach risk management. We will examine information about councils’ understanding of risk, the approaches they use to manage risk, including the role of councils’ audit and risk committees, and how councils communicate risk to their communities.

    Our stocktake will inform potential future areas of work. We want to identify where we can best add value, given the work of others (for example, Local Government New Zealand and the New Zealand Society of Local Government Managers) in supporting councils to improve their management of risk.
  • Review of service performance – Auckland Council
    Section 104 of the Local Government (Auckland Council) Act 2009 requires the Auditor-General to review the service performance of the Auckland Council and each of its council-controlled organisations from time to time. In 2019/20, we intend to examine how effectively and efficiently Auckland Council is building its resilience and preparedness to respond to disasters, working in partnership with other agencies, local iwi, and communities to reduce disaster risks and prepare for disaster response.
    • Our ongoing focus on Auckland matters
      Alongside the work required by legislation, we have an ongoing interest in examining issues affecting Auckland because of its significance to New Zealand. About 33% of New Zealand’s population lives in the Auckland region, and nearly 600,000 more people are expected to be living in the Auckland region within the next 20 years. The Auckland population is one of the most diverse in the world. A large proportion of central government capital and social investment is in Auckland to address transport and housing issues. We intend to carry out work on the Auckland City Rail Link in 2019/20 and the Tāmaki regeneration programme in 2020/21 as part of our Procurement themed work. We are also considering an examination of public housing provision in Auckland.
  • Inland Revenue Department’s Business Transformation programme
    Building on our previous work in 2015/16 and in 2017/18, we are interested in knowing whether the public spending on the Inland Revenue Department’s Business Transformation programme is delivering the intended benefits. The Business Transformation programme is significant because of the large amount of public funds being spent which is estimated to cost in excess of $1.3 billion, the critical role Inland Revenue carries out in collecting Crown revenue, and the effect that the tax system has on New Zealanders and businesses. We had planned to carry out this work in 2020/21. We now plan to carry it out in 2019/20 so that we can provide more timely assurance and relevant advice to Parliament and Inland Revenue.
  • The Treasury’s 2019 Statement on the Long-Term Fiscal Position
    The long-term financial sustainability of government is critical for New Zealanders’ inter-generational well-being. The choices that governments make about public spending, tax, and borrowing, and the balance between them affect New Zealand’s economic, social, and environmental outcomes and the Government’s long-term resilience.

    At least every four years, the Treasury is required to prepare a statement on the Government’s long-term fiscal position. It is an important part of the good financial management of government. We intend to review the Treasury’s next long-term fiscal statement. We are interested in understanding and commenting on:
    • the approach that the Treasury takes;
    • the Treasury’s long-term fiscal model and how it is used; and
    • the links between the long-term fiscal model and the information presented in the Statement on the Long-Term Fiscal Position.
  • Controller function
    Our Controller function is a core part of the Controller and Auditor-General’s role as public “watchdog” and provides assurance to Parliament and New Zealanders that the Government has spent public money in line with Parliament’s authority. We will provide six-monthly updates about our Controller work.

In Part 3, we provide more detail about our proposed work on these issues.

3. Regular reports

Each year, we publish a suite of sector reports on the results of our work across different sectors. Using information from our audits, including our understanding of the entities and their control systems, our sector reports discuss key issues and trends, systemic issues, and opportunities for improvement within sectors.

We prepare reports on some sectors every year – for example, the results of local government audits, and our central government report that sets out the results of our audit of the Financial Statements of the Government and the Controller function. Reports on other sectors are prepared periodically. We decide which other sectors to report on, based on matters arising in particular sectors or the theme we have chosen to focus on.

4. Sharing good practice

To improve their performance, public entities need to understand what is expected of them and have access to good practice guidance that is relevant to the New Zealand context. Public entities tell us that they would welcome more good practice guidance. As the auditor of every public entity, we are well positioned to guide public entities on what good looks like. Improving the performance of individual public entities will help contribute to improvement in the performance of the entire public sector.

In 2019/20, we will be more active in sharing good practice with public entities. We will update our good practice guidance material, and implement a range of approaches to share good practice more. We will regularly host meetings and other events to share our good practice guidance and examples of where we observe through our work activities being done well. We will also point entities to other organisations that do similar activities “better” or “well”.

We also plan to improve our own accountability documents to lead the way for others, and carry out more follow-up work with entities to ensure that the recommendations from our audits are implemented.

5. Influencing improved performance and accountability

How effective the public sector accountability system is in providing assurance that public entities are meeting their required responsibilities and standards is critical to New Zealanders’ trust and confidence in government.

Our increased focus on influencing improvements in the public sector accountability system will continue in 2019/20. Following publication of our Annual plan 2018/19, reforms to different aspects of New Zealand’s performance and accountability systems were proposed. In response, we reassessed the work we had planned to carry out and undertook other work to influence positive change in the future public management system. Appendix 2 describes the work we have completed or intend to complete in 2018/19.

In 2019/20, building on our previous work, we intend to examine the state of the public sector accountability system. We want to influence and support future public sector management reforms to strengthen the accountability system. Our work will include an assessment of the state of public sector performance reporting. We want to assist public entities to improve their performance measurement and reporting practices. We will consider this in the context of the Government’s emphasis on well-being.