Part 6: Status of Follow-up Action on Previous Reports

Central government: results of the 2002-03 audits.

6.1
The Auditor-General reports on a broad range of topics and issues within the public sector. Parliament is the primary audience for these reports. By their nature, however, these reports are usually focussed on the Executive. This focus may be on:

  • single agencies; or
  • multiple agencies; and/or
  • central agencies (the Treasury, the State Services Commission, and the Department of the Prime Minister and Cabinet).

6.2
For formal consideration of our reports by the House, we have been reliant on relevant subject select committees taking the opportunity to consider the reports and deciding whether they want to ask for a Government response.

6.3
The Officials Policy Committee (comprising the chief executives of the three central agencies) has also considered the need for a Government response to our reports.

6.4
Both of these mechanisms have been informal. Nevertheless, they formed a basis to complete the “accountability loop” between:

  • the Auditor-General’s reports;
  • Parliamentary scrutiny of the reports; and
  • Government responses.

6.5
This article gives a brief analysis of each of our reports in the past financial year. It follows a similar format to the articles that we have published in regard to follow-up action on our previous reports in each of the past two years1, with updated comments as appropriate. However, for this article, we have also considered the wider impact of each report.

6.6
We have not included our reports on local government issues, or on one-off inquiries, except where there is a remaining parliamentary interest.

Māori Land Administration: Client Service Performance of the Māori Land Court Unit and the Māori Trustee

Date Presented

26 March 2004

Brief Description

Māori Land owners are part of a complex land system that owners of General Land are not. The complexity of this system is a product of history – arising from the efforts of past governments to reconcile customary Māori communal ownership of land with an individual title system based on British land laws. About 6% of New Zealand’s total land area is Māori Land.

Māori Land generally has multiple owners, with the ownership of Māori Land titles currently divided into more than 2.3 million interests. As owners die and their descendants inherit their interests – which can only be achieved by applying to the Māori Land Court Te Kooti Whenua Māori – the number of owners of Māori Land increases and the fragmentation of Māori Land ownership continues.

We investigated the effectiveness of the client service provided by:

  • the Māori Land Court Unit (an administrative unit within the Ministry of Justice Tahu o te Ture, that provides support for the Judges of the Māori Land Court, as well as information and advisory services for Māori land owners); and
  • the Māori Trustee Te Kaitiaki Māori (who works within the Māori Land system to manage Māori Land on behalf of owners who engage the Trustee’s services through the Māori Trust Office, which is part of the Ministry of Māori Development Te Puni Kōkiri).

We assessed selected operations of the two organisations, and considered how they interact with each other and with other organisations.

Key Findings and Recommendations

We reported that, overall, the Māori Land Court Unit has provided a good level of service to its clients through strategic planning based on client surveys, the appointment of Advisory Officers, and the introduction of the Māori Land Information System. Areas where improvements could be made include:

  • management and reporting of applications;
  • training of case managers; and
  • standardisation of practices and processes between registries.

We also found that the Māori Trustee has provided his clients with a good level of client service. However, we noted that the Trustee’s client service could be improved in the following areas:

  • establishing more qualitative land management performance measures – particularly in relation to rent collection and review;
  • developing a set of criteria to determine which owners should receive written Reports to Owners, and which should be delivered in a formal meeting;
  • a strategy for reducing the backlog in processing Court orders in and correspondence; and
  • implementing a time-recording system that allocates staff time to individual clients.

We identified areas of risk to the Trustee’s future client service performance, including the ongoing government review of the Trustee’s role and functions. We also noted some opportunities to increase the amount of interaction between the Māori Land Court Unit and the Trustee so that clients receive a more seamless service.

Select Committee Scrutiny

The Māori Affairs Committee considered our report in May 2004.

Impact of Our Report

It is too early to gauge the impact of our report. However, we propose to follow up with both the Māori Trustee and the Māori Land Court Unit to see what improvements have been made as a result of our report. We will report on these at a later date.

Issues Outstanding

We will maintain an active interest in the issues raised in our report; in particular the completion of the government review of the Māori Trustee.

The State Services Commission: Capability to Recognise and Address Issues for Māori

Date Presented

30 January 2004

Brief Description

The Government has clear expectations of the Public Service in relation to the results it wants to achieve for Māori. The Government influences Māori outcomes through its policies and funding, and the way that public sector entities purchase and deliver services.

Part of the role of the State Services Commission (the Commission) is to provide assurance to the Government on the strategy, capability and performance of Government departments – including in relation to departments’ Māori capability.

The objective of our audit was to assess the capability of the Commission to recognise and address issues for Māori in the advice it provides to other departments and Ministers.

We examined the Commission’s own capability to recognise and address issues for Māori. We focussed on:

  • the Commission’s interpretation of its roles and obligations in relation to Māori and the Public Service;
  • the Commission’s corporate capability;
  • the role of the Deputy Commissioner Teams in providing assurance;
  • the Commission’s policy advice process – using the Senior Leadership and Management Development initiative as an example; and
  • the Commission’s performance of its Equal Employment Opportunities responsibilities.

Key Findings and Recommendations

We reported that the Commission has positioned itself well to work alongside departments to build a Public Service that produces more effective outcomes for Māori. We noted some areas where we think the Commission could further enhance its capability, and we made some recommendations in this regard.

While we found that the Commission recognised responsiveness to Māori as a primary focus, we noted there was some potential for confusion between the role of Te Puni Kōkiri and the Commission in relation to providing advice on departmental capability. We recommended that the Commission complete its discussions with Te Puni Kōkiri to clarify their respective roles.

We found that the Commission has in place appropriate internal systems and processes to give effect to its role for Māori. A coherent strategy is supported by policies and practices designed to maintain and enhance corporate Māori capability. We recommended that the Commission consider evaluating the impact of the strategy.

The Commission provides capability assurance through the management and review of departmental and chief executive performance. We recommended that the Commission should take steps to provide more clarity, formality, and certainty in its relationships with chief executives and their departments.

We found that the Commission’s Senior Leadership and Management Development strategy was well aligned to the Government’s strategic goals for Māori and the public service, and that the Commission has clearly defined its own role in promoting Equal Employment Opportunities in relation to the role of departments.

Select Committee Scrutiny

The Māori Affairs Committee considered our report in February 2004, and the Government Administration Committee considered it in April 2004. The Government Administration Committee was particularly interested in how our findings related to other government organisations, and has encouraged us to undertake similar reviews of the capability of other organisations in the State sector to recognise and address issues for Māori.

Impact of Our Report

The Minister of Māori Affairs has displayed an interest in the extent to which the State Services Commission has addressed the findings of our report.

Issues Outstanding

We will maintain an active interest in the issues raised in our report. We also propose to conduct a similar performance audit in respect of the Treasury (see page 57 of our Annual Plan 2004-052).

Social Security Benefits: Accuracy of Benefit Administration

Date Presented

10 December 2003

Brief Description

In 2002-03, the Ministry of Social Development (The Ministry) paid $11,743 million to over 800,000 beneficiaries. Given the very large sums involved, it is clearly important to ensure that payments are made accurately.

Inaccurate benefit payments can result in direct costs to the Ministry from the administrative actions associated with identifying and correcting any errors. Opportunity costs also arise from Ministry staff having to spend time and effort on correcting benefits instead of undertaking other work.

Beneficiaries can suffer hardship when payments are made incorrectly. Under-payments deprive them of income to which they are entitled. Over-payments generally must be repaid, placing financial pressure on beneficiaries.

We sought to provide Parliament with assurance that the Ministry has effective systems and methods for ensuring benefit accuracy; and that Parliament can place reliance on the performance data that the Ministry reports.

Key Findings and Recommendations

The Ministry’s obligation is to pay benefits correctly on the basis of the information available to it. It measures accuracy in terms of this obligation. It does not currently collect information in other areas that we think are relevant to the general issue of accuracy.

Because of the limitations of the information currently available, we were unable to form a clear view about whether or not the Ministry is performing well.

Our report identified a number of areas in which we believe the information on benefit accuracy currently collected and published by the Ministry could be extended and improved. We made a number of recommendations to highlight areas where improvements could be made. These include that the Ministry:

  • explores enhancements to the benefit processing computer system;
  • learns more about the extent and causes of under- and over-payments;
  • continues to promote internal sharing of information on approaches to staff development and managing caseloads;
  • explores the possibility of allocating more case managers to regions with large numbers of clients with complex circumstances;
  • investigates the possibility of applying high-level statistical analysis of service centre data;
  • requires all regions to assess the performance of staff consistently, with accuracy being accorded an appropriately high priority;
  • provides all Regional Commissioners and Regional Operations Managers with training on the appropriate interpretation of the Accuracy Reporting Programme’s results;
  • regularly performs a risk-sizing exercise to estimate the amount of overpayments;
  • continues to explore the collection and analysis of information on errors and their size and causes;
  • treats all of its processes for administering benefits as components of an integrated system; and
  • periodically undertakes exercises to estimate the number of people who are potentially eligible for social security assistance but who have not applied.

Select Committee Scrutiny

The Social Services Committee considered our report in February 2003, and questioned Ministry staff about various matters identified in the report.

Impact of Our Report

Two sets of stakeholders have benefited from our report:

  1. Parliament, as it gains an insight into what information is being reported and what is not.
  2. Beneficiaries, and people who may become beneficiaries, as they become more informed about what happens at the Ministry as they endeavour to get their full and correct entitlements.

Issues Outstanding

We will maintain an active interest in the issues raised in our report. We propose to ask the Ministry how it has responded to our report.

Ministry of Health: What Further Progress Has Been Made To Implement the Recommendations of the Cervical Screening Enquiry?

Date Presented

8 December 2003

Brief Description

Organised cervical screening was established in New Zealand in 1990. Such screening can be effective in reducing the incidence of cervical cancer and, since 1990, both the incidence of, and mortality from, invasive cervical cancer have declined in this country.

However, cervical screening is not without its limitations, and even high-quality screening programmes will not be able to prevent all cases of invasive cervical cancer. These limitations can be minimised if screening is properly organised, and appropriately monitored and evaluated.

This was our second report in relation to recommendations made to the Minister of Health in April 2001 by a Committee of Inquiry that was set up to look into the under-reporting of cervical smear abnormalities in the Gisborne region.

Our first report3 – published in February 2002 – concluded that good progress was being made to implement the recommendations in a number of areas, but that effective monitoring, evaluation, and audit of the National Cervical Screening Programme (the Programme) still required action.

In this follow-up report we have sought to establish what progress the Ministry of Health (the Ministry) has made since the January 2003 independent review of the implementation of the Committee of Inquiry recommendations.

Key Findings and Recommendations

In summary, after two and a half years:

  • 31 of the 46 recommendations have been implemented or are expected to be implemented by June 2004;
  • work has been planned or has begun on 8 recommendations. However, the recommendations are unlikely to be implemented by June 2004;
  • 2 of the recommendations will not be implemented;
  • work has begun on a further 4 recommendations (relating to ethics committees) but it is unclear whether they will be implemented; and
  • the Ministry is still to decide whether 1 recommendation will be implemented.

The most significant issues for the future will involve ensuring that the appropriate assurance processes are in place around the quality aspects of the Programme – such as completing the Audit of Invasive Cervical Cancer, fully implementing the Operational Policy and Quality Standards and auditing service provider compliance with the standards, and continuing the reviews conducted by the Independent Monitoring Group. The National Screening Unit will need to be more open and collaborative with stakeholders, and ensure that all key staff positions are filled.

We consider that the use of an independent expert to review implementation of the recommendations has added considerable value to the process, and would like to see this type of review continued and expanded to focus on the effectiveness of the whole Programme.

Select Committee Scrutiny

The Health Committee considered our report in December 2003. The Committee indicated that the review was timely, given the Committee’s consideration of the Health (Screening Programmes) Amendment Bill.

Impact of Our Report

At the time we did our audit there was public concern over the status of some of the recommendations as well as the time being taken to implement them, e.g. the Audit of Invasive Cervical Cancer. Our report gave assurance on these matters.

In addition, we were pleased to note that the draft legislation intends that an independent review of the Programme will be undertaken on a regular basis.

Issues Outstanding

We will continue to keep the progress in implementing the Committee of Inquiry’s recommendations under review. In this respect, we are meeting with the Ministry quarterly to monitor progress.

Managing Threats to Domestic Security

Date Presented

30 October 2003

Brief Description

The events of 11 September 2001 led to an increased focus on domestic security around the world. A mindset change took place whereby responsibility for domestic security no longer lay solely with the traditional security agencies, but began to be shared across a wide range of government agencies. The Bali bombings on 12 October 2002 reinforced the need for an increased focus on domestic security, especially for countries such as New Zealand and Australia.

Threats to domestic security include threats from terrorism, cyber attack on major information or business systems, and attacks against critical physical infrastructure (such as the public water supply). Domestic security can also be affected by events which are likely to threaten the country’s economic and social well-being. Such events might include an outbreak of foot and mouth disease, the introduction of pests and diseases that will affect primary industry, or an outbreak of infectious disease – the SARS virus was a recent example.

Our audit set out to provide assurance to Parliament and the public that threats to the country’s domestic security were being adequately managed. To do this, we interviewed staff from 18 separate agencies and examined the arrangements in place to identify and respond to domestic security threats. In particular we looked at whether:

  • there was an adequate framework to guide domestic security efforts;
  • the collection and dissemination of relevant intelligence was well coordinated and the intelligence collected was sufficient to address the risks, goals, and objectives identified;
  • the preparedness and capability of the various agencies to respond to threats to domestic security was being monitored; and
  • there were effective arrangements for monitoring and evaluating the allocation of resources used to achieve domestic security goals.

Key Findings and Recommendations

We found that New Zealand has taken, and is continuing to take, steps to ensure that it is meeting current “international best practice” in relation to domestic security.

We noted that both formal and informal mechanisms exist to share and co-ordinate domestic security information and intelligence. The capability to collect and analyse information was enhanced after September 2001. A number of agencies carry out or take part in exercises or simulations to test their capabilities and procedures.

Our audit identified a number of issues that need to be addressed. These arose mainly from the number of contributing agencies whose primary responsibilities do not have a domestic security focus. We noted that:

  • there is no single document or collection of documents that sets out a whole-of-government Domestic Security Strategy;
  • a cross-agency information/intelligence system is in the early stages of development;
  • current reporting on the preparedness of domestic security arrangements supports individual agency accountability, but does not provide a whole-of-government picture of preparedness; and
  • while the traditional domestic security response elements are well-practised and planned in response aspects, the requirements of the recovery phase have not received as much attention.

Select Committee Scrutiny

The Foreign Affairs, Defence and Trade Committee considered our report on 20 November 2003. The Committee was particularly interested in the aspects of the review covering the sharing of intelligence, and New Zealand’s preparedness for an emergency.

Impact of Our Report

The Department of the Prime Minister and Cabinet (DPMC) accepted the findings of our report, and has undertaken to address them within 12 months. DPMC has analysed our report and has identified eight findings. A paper was given to the Officials Committee for Domestic and External Security Co-ordination (ODESC) in December 2003, which outlined the action that is required in respect to the findings. ODESC agreed that work currently under way would address 5 of our recommendations, and the remaining 3 required more work to determine how they would be addressed. The 3 were:

  • strengthening the foreign intelligence process by undertaking a gap analysis of what the collector agencies have been asked for compared with what they are able to provide;
  • establishing a more formal process for identifying domestic intelligence requirements that includes inter-agency consultation; and
  • conducting a comprehensive whole-of-government stocktake of capabilities to respond to domestic security events, to help identify any overlaps or gaps.

The first 2 recommendations are being addressed in a paper to ODESC in June 2004, and a paper addressing the third recommendation was prepared for the ODESC meeting in March 2004.

Issues Outstanding

We have met with the Director of the Domestic and External Security Secretariat and discussed implementation of the recommendations.

We will complete a short audit of the matters identified in our report at the end of 12 months.

Co-ordination and Collaboration in the Criminal Justice Sector

Date Presented

9 October 2003

Brief Description

The criminal justice sector is a complex network of discrete but procedurally connected agencies. The four core criminal justice agencies are the Ministry of Justice (the Ministry), the Police, the Department for Courts, and the Department of Corrections.

The core criminal justice sector is a good example of government agencies that must work together in the interests of effectively performing their role. The Government and Parliament have an expectation that Chief Executives and their agencies will identify common outcomes, and actively pursue strategies to achieve these outcomes through collective working.

Our audit examined the way in which the four core agencies were working together to achieve the Government’s goals for the criminal justice sector. In particular we sought to examine:

  • how the Ministry was discharging its responsibilities for co-ordinating policy advice and other strategic activities across the sector;
  • how the Ministry and other agencies managed their relationships; and
  • how all agencies were consulting on plans, programme implementation, and the development of shared outcomes.

Key Findings and Recommendations

We identified many examples of good practice across the sector, and a strong commitment to sharing information and collaboration. The sector was responding positively to the need to work as a sector to meet Government priorities, and was taking positive steps to clarify roles and responsibilities and strengthen governance structures.

At the same time, the impact of one agency’s plans or activities on the other agencies in the criminal justice sector had not always been well understood. The agencies had encountered difficulties in maintaining oversight of one complex project with sector-wide implications, under a tight Ministerial timetable. Important lessons have been learned, and new processes put in place for project oversight and managing risk.

We made the following recommendations:

  • In the area of strategic planning, the criminal justice agency Chief Executives should support the Chief Executives Forum by attending all meetings, and that the agencies should consider options for integrating their work in areas such as information systems and sectoral planning and reporting.
  • Agencies should improve collaboration in policy development by routinely consulting on their draft policy work programmes. We also suggested that sector Chief Executives should promote active and routine collaboration between research units in each of their agencies in order to avoid duplication, and to consider opportunities for sector wide research.
  • A key role for the Ministry should be to oversee the status of information technology systems in the sector, and evaluate sector-wide impacts of any planned changes.
  • All justice sector agencies should consider establishing Māori advisory groups. These can serve as a valuable resource for Chief Executives by providing a Māori community perspective on issue for the agency. In addition, an integrated sector strategy should be developed to focus on system-wide outcomes for Māori.
  • The criminal justice sector agencies should draw lessons from the events and processes surrounding development of the sentencing and parole legislation for the future management of projects with sector impacts.

Select Committee Scrutiny

The Law and Order Committee considered our report in October 2003.

Impact of Our Report

Our report was accepted by the entities concerned, and the Treasury and the Department of the Prime Minister and Cabinet have both found it useful. The Ministry of Justice recently completed an analysis of our report, highlighting the recommendations and action taken by sector departments. Justice sector CEOs have now considered this analysis. Indications are that the CEOs have generally found the comments in our report useful to reflect on, although not all of the recommendations have been agreed to.

Issues Outstanding

We will maintain an active interest in the issues raised in our report. We intend to follow-up this report, focussing either on issues in the criminal justice sector, or on co-ordination and collaboration in another sector.

Inland Revenue Department: Performance of Taxpayer Audit

Date Presented

6 August 2003

Brief Description

The Inland Revenue Department (the IRD) collects most of the money that the Government requires to carry out its programmes and implement its policies. It is in the interests of New Zealanders collectively that the level of compliance with tax laws is as high as possible.

Each year the IRD audits thousands of taxpayers to detect non-compliance with tax laws, and to deter potential non-compliance in the future. Taxpayer audits are a major part of the IRD’s work and involve 881 of its 4800 staff.

This report examined the IRD’s taxpayer audit function in the context of the IRD’s Taxpayer Compliance Model. We wanted to establish whether taxpayer audit is in a position to deliver the IRD’s vision to improve taxpayer compliance.

Key Findings and Recommendations

We found that taxpayer audit was under-developed – much of what was needed for taxpayer audit to play its full part in the Taxpayer Compliance Model and to enable the IRD to meet its strategic direction was not in place. The IRD agreed that the time has come for taxpayer audit to be improved and had already initiated a number of projects.

We recommended that the IRD’s strategy for taxpayer audit needed to be further developed. In particular, the IRD should:

  • improve the focus and conduct of audits by implementing best practice case management techniques, and by identifying the case management requirements of taxpayer audit.
  • strengthen capability through improving formal ongoing training of investigators and reviewing the availability and use of information technology. The IRD should also address the strategies for collection and use of intelligence in taxpayer audit.
  • improve the measuring and reporting of performance so that Parliament receives a more transparent view of the value of additional tax assessed. The IRD should also continue to explore ways of assessing the impact of audits on taxpayer compliance.

We found that there is currently insufficient accountability for ensuring that good practices and new initiatives are taken up. Securing the changes needed for taxpayer audit to support the IRD’s strategic direction will require the implementation of sound change management arrangements.

Select Committee Scrutiny

The Finance and Expenditure Committee decided not to inquire into the matters raised in our report.

Impact of Our Report

The IRD has acknowledged that there are a number of changes to be made in the area of taxpayer audits. Many of these changes were well progressed by the time our report was tabled.

The IRD has an extensive process in place to fully implement all of our recommendations. A key feature of this process is the establishment of a Business Initiative Governance Board to oversee changes to taxpayer audit and other new initiatives. The IRD has invited the Office of the Auditor- General to attend meetings of this Board as an observer on a quarterly basis.

We have attended two Business Initiative Governance Board meetings, the most recent in March 2004. At that meeting, the IRD reported that:

  • our recommendations had been aligned with IRD’s Audit Strategy principles; and
  • 5 of our 11 recommendations had been completed by the IRD.

Issues Outstanding

We will continue to attend Business Initiative Governance Board meetings to see what further progress is made to implement our recommendations.

Management of Hospital-acquired Infection

Date Presented

25 June 2003

Brief Description

Hospital-acquired infections are recognised nationally and internationally as a serious problem. Here, and in other developed countries, it is estimated that about 10% of patients admitted to hospital will acquire an infection as a result of their hospital stay. The costs of dealing with hospital-acquired infections in this country’s public hospitals are estimated to be more than $137 million a year.

A fair proportion of hospital-acquired infections can be avoided through effective infection control practices. Everyone working in a hospital should take responsibility for infection control. Making sure they do take responsibility – and that reasonable action is taken to manage the risk of infection – is challenging.

Infection control is an essential element of good clinical practice and is vital for patient safety. The purpose of our performance audit was to describe and assess systems for managing hospital-acquired infection in public hospital. The performance audit was reported in two volumes.

Key Findings and Recommendations

We gathered information about infection control arrangements in public hospitals through an extensive survey questionnaire that we sent to all 21 District Health Boards (DHBs). All DHBs were provided with comparative feedback that we hope they will use to improve infection control practices. The results of the survey form the basis of Volume Two of our report.

We found that some dimensions of infection control are working particularly well – such as collaboration between infection control and laboratory staff. Others require more attention – for example, auditing of infection control practice, which provides a vital source of assurance about compliance by hospital staff.

We recommended that:

  • The Ministry of Health (the Ministry) should review elements of their framework for infection control, and should work towards establishing national surveillance of hospital-acquired infection;
  • The Ministry should continue its actions to improve DHBs’ monthly risk reporting;
  • DHB Boards should increase the scope of their planning, reporting and oversight of infection control. This could include making greater use of their Hospital Advisory Committees, and obtaining community feedback;
  • Hospital services should consider increasing the long-term planning associated with infection control. Hospital services should also periodically review whether their infection control resources are adequate;
  • Hospital services should ensure that their infection control arrangements are well co-ordinated with the rest of the hospital service;
  • Hospital services should review the scope of their infection control arrangements and ensure that staff awareness of infection control polices and practices is maintained at a high level. Auditing compliance with the infection control regime should be treated as a core quality assurance activity; and
  • Hospital services should ensure that there are robust procedures in place for identifying, managing and reporting instances of hospital-acquired infection.

Select Committee Scrutiny

We presented our report to the Health Committee in October 2003. Members of the Committee were extremely interested in the report. The Committee subsequently held an inquiry into hospital-acquired infection, and released its findings in May 2004. The inquiry endorsed our report, and recommended that the Ministry implement our key recommendations.

Impact of Our Report

We also presented our report to the National Infection Control conference in Dunedin, and have been consulted by the Otago DHB about the implications and implementation of our recommendations.

Issues Outstanding

Our report made 36 recommendations, and we are now working with the Ministry to facilitate improvements in infection control practices in hospitals.

1: Central Government: Results of the 2001-02 Audits, parliamentary paper B.29[03a], pages 95-128; and Central Government and Other Issues 2001-02, parliamentary paper B.29[02b], pages 99-126

2: Parliamentary paper B.28AP(04).

3: Ministry of Health: Progress in Implementing the Recommendations of the Cervical Screening Inquiry.

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