Part 5: Capability report

Annual report 2003-04.

What we set out to achieve in 2003-04

Our key capability objectives for 2003-04 (as set out on pages 43-44 of our Annual Plan 2003-04) were to:

1. Review our future capability needs as part of the development of our Strategic Plan.

2. Enhance our capability, specifically to:

  • implement our revised contestability regime (audit resourcing model) for the provision of audit services;
  • implement a communications strategy;
  • seek opportunities to improve relationships – internally and externally;
  • continue to invest in Information and Communications Technology (ICT) and knowledge management systems; and
  • review our Equal Employment Opportunities Programme and Effectiveness For Māori Plan.

3. Improve our own measurement and reporting of capability, specifically to:

  • better define targets for our measures; and
  • consider further measures of capability.

Our capability management framework

As we developed our five-year Strategic Plan in 2003-04, we undertook a comprehensive review of our current and future capability.

We define capability as:

“Having, or having access to, a combination of people, resources and systems that enables us to:

  • Deliver our outputs and results to meet current needs and stakeholder satisfaction; and
  • Maintain our ability to cope with likely future changes.”

The framework and process we used for reviewing our current and future capability and determining our key capability initiatives can be represented as follows:

Figure 5.

That is, within the context of our five-year Strategic Plan – which describes at a high level the kind of culture, competencies and behaviours we need in the Office of the future – we reviewed our current capability, then looked at the likely changes in our environment and their implications on our people, culture and processes/systems, and came up with key capability initiatives to address these implications.

Below, we describe briefly the key findings from our review (for a broader analysis, see pages 32-37 of our Annual Plan 2004-05).

Our current capability to respond

The key challenges we identified in relation to our current capability were:

  • the Office was struggling to maintain our capability and market competitiveness;
  • we had to continually apply senior resources to deal with unplanned work (e.g. inquiries);
  • we had limited ability to invest in research and development and product development;
  • our timeliness was variable, especially for inquiries and performance audits;
  • our ability to invest in capability development was limited; and
  • there was no knowledge management strategy across the Office.

Our future capability requirements

Through our strategic planning process, we identified the following future capability requirements for the Office if we are to achieve our Strategy and our desired outcomes.

Our staff

  • Increased capability and capacity to:
    • undertake research and development, and product development;
    • carry out performance audits – including building a critical mass of professionals working in this area (for peer support, training, peer review and the development of robust methodologies and approaches); and
    • undertake inquiries.
  • Strengthening of our core capabilities/skills in:
    • professional leadership of public sector auditing and accounting;
    • relationship management (to further build relationships with our key stakeholders and work collaboratively with others); and
    • strategic leadership.
  • Encouragement and recognition of the following behaviours:
    • Office-thinking;
    • joint working;
    • internally and externally; and
    • innovation.

Our processes

  • The creation of more flexible access to the “best people”.
  • The ability to backfill roles.
  • The ability to better balance productivity with innovation and create “headspace” to think.
  • Greater alignment of our Corporate Support strategies and processes across the OAG and Audit New Zealand.

Our systems

  • The design and implementation of a Knowledge Management strategy and an Information Systems Strategy.
  • Improved project management disciplines.

The specific capability initiatives we will take are outlined on pages 62-65 of our Annual Plan 2004-05.

Measuring our capability

For the last two years, we have provided a “capability snapshot” as part of our reporting on capability. This has been intended to provide a broader view of the Office’s capability profile, and has looked at:

  • base information – reporting what is our current capability (staff numbers, function, gender, ethnicity, etc.); and
  • information which shows what we have done to maintain and enhance our core capability.

We will continue to provide similar information this year. However, in addition, we will provide – as a trial – some tentative conclusions we have made on the adequacy, quality and effectiveness of our capability based on this information.

We acknowledge that this is a new area of reporting, and we do not yet have in place all the measures needed to form complete views about this. (In our Annual Plan 2004-05, we have proposed some new measures for capability, which include quality, adequacy and effectiveness measures. Over the coming year, we will continue to develop these measures and report on them in our next Annual Report.)

In each of these categories, the key capability questions we have used to form our tentative conclusions are as follows.

Adequacy

  • Does the Office have – or have access to – enough skilled, experienced and competent people?
  • Can the Office attract suitably qualified staff?
  • Does the Office have a ready supply of future leaders?
  • Does the Office have sufficient working capital to sustain its work?
  • Does the Office have adequate information systems to effectively perform its work?

Quality

  • Does the Office maintain and enhance the skills of its existing staff?
  • Does the Office create an environment where skilled people want to stay and work?
  • Does the Office facilitate diversity?

Effectiveness

  • Does the Office have effective and efficient mechanisms to store, retrieve and share information/knowledge?
  • How skilled, experienced and competent are our people to perform their work?
  • Do our systems and processes support the work of the Office?

Current capability – Base information

This information provides an understanding of the size, scale and distribution of our current resource base, specifically:

  • the current size of our staff resources;
  • the distribution of our staff by function, gender and ethnicity;
  • the current size of our contracted resource base; and
  • the scale of our information technology systems.

 Unit of measure As at 30 June
2004 2003 2002
STAFF NUMBERS
OAG
 FTE 52.4 54.5 51.4
Audit New Zealand FTE 178.4 194.2 197.0
Total FTE 230.8 248.7 248.4
FUNCTIONAL DISTRIBUTION
Audit/Assurance
 % 65 65 62
Technical and Advisory % 4 7 5
Corporate Support % 27 23 28
Management % 4 5 5
GENDER DISTRIBUTION
All Staff
Female % 46 49 53
Male % 54 51 47
Management Staff
Female % 38 8 17
Male % 62 92 83
ETHNICITY DISTRIBUTION
NZ European % 56 62 65
NZ Māori % 3 3 6
Pacific Island % 1 2 2
Asian % 13 9 15
Other European % 8 13 12
Other ethnic groups % 4 7 -
Undeclared % 15 4 1
CONTRACTED RESOURCES
Audit Service Providers (private sector firms engaged to undertake annual audits) No. 81 71 Not reported

Additional information

Scale of our information technology systems

The Office is highly dependent on information technology (IT) to complete its work. Audit New Zealand is especially dependent – its field audit staff need to have remote access in order to deliver services to entities (i.e. offline access to its technical audit and accounting databases and its electronic audit management tool – “TeamMate”).

Consequently, the Office has a 1:1 ratio of personal computers (or laptops) to staff. All staff have access – both network and dial-up – to the operational systems required for their jobs.

There are different IT systems in use within the OAG and Audit New Zealand. This reflected the distinct operating environments which existed under the contestable audit model. With the removal of contestability, the Office intends to align its IT systems (the development of an Office-wide Information Systems Strategic Plan (ISSP) is already underway). Some initiatives have already been implemented to improve Office-wide communication and shared access, for example, a shared Intranet Site has been developed to provide information, and allow for consultation, about our Strategy.

An external review of the Office’s IT systems was completed in 2003-04, as the basis for the development of the ISSP. This review confirmed that:

  • the Office has a solid and modern (i.e. under 3 years old) IT infrastructure; and
  • the Office has a sound programme of frequent upgrades for both hardware and software.

The review also identified the following as areas for development:

  • the IT systems of the Office are adequate but under-utilised;
  • the Office is light in terms of its IT staff capability relative to other organisations of similar size and IT usage; and
  • there are opportunities for greater alignment of IT across the Office.

These areas for development will be addressed as part of the implementation of the ISSP over the coming year.

Contract resources

The Office supplements its permanent staff resource base at various times of the year to assist in the delivery of its work. In 2003-04, within Audit New Zealand, this supplementation included:

  • 4 secondees from KPMG in Poland;
  • 6 secondees from Asian Audit Offices;
  • 2 secondees from the Australian National Audit Office (ANAO);
  • 1 secondee from the UK National Audit Office; and
  • 1 long-term secondee from the UK Audit Commission.

Audit New Zealand has reciprocal secondment arrangements with the ANAO and the UK Audit Commission, where 3 of our staff were seconded for varying periods in 2003-04.

Current capability – Other information

This information provides an understanding of the “supply characteristics” of our current capability, specifically:

  • the average numbers of applicants who apply for key Office vacancies;
  • the percentage of senior staff in Audit New Zealand who are perceived to have future potential;
  • the number of staff who have been internally promoted to senior positions; and
  • the Office’s current working capital (as at 30 June 2004).

 UNIT OF
MEASURE		 2003-04 2002-03
APPLICANTS FOR OFFICE VACANCIES
Senior positions (i.e. positions within CMG*)
Total number of vacancies at senior levels No. 6 Not reported
Average number of applicants per externally advertised vacancy No. 10 Not reported
Key operational positions
Graduates (ANZ)
• Total number of vacancies		 No. 13 Not reported
• Number of applicants No. 113 Not reported
INTERNAL STAFF PROMOTIONS
Total number of internal staff promoted to senior positions (i.e. positions within CMG*) No. 5 Not reported
Total number of internal staff promoted to management positions (i.e. Directors, Managers, Sector Managers, Performance Auditors and Corporate Managers) No. 13 Not reported
CURRENT WORKING CAPITAL
Working capital ratio % 144% 153%

* Combined Management Group – membership is described in Appendix 1 on page 165).

Additional information

Audit New Zealand’s Capability (Talent) Management System

Audit New Zealand has continued to operate its Capability (Talent) Management System. This system is used to form views about the current and future capability of senior staff, and to provide a framework for the development of strategic capability management initiatives. It considers such things as:

  • current levels of demonstration of the core competencies required for senior roles;
  • perceptions about how aligned senior staff are with the Strategy;
  • perceptions about potential for career advancement or job expansion; and
  • perceptions about likelihood and significance of senior staff leaving.

A wide range of views is incorporated into the assessments, and they are nationally moderated. From its Capability (Talent) Management System, Audit New Zealand has formed some conclusions on the perceived extent, depth and challenges to its future capability. For 2003-04, the key findings from the Capability (Talent) Management assessments were:

  • There is good vertical bench strength with a solid base of technical expertise.
  • There are areas of development focus in the core competencies of “innovation” and “leading and managing people”.
  • There is a good level of alignment with the Office’s Strategy.
  • There is a recurrence of key development themes for some individuals – suggesting limited implementation of development interventions.

Over the 2004-05 year, we will look at the applicability of Audit New Zealand’s Capability (Talent) Management System for the OAG.

External acknowledgement

Audit New Zealand received first place in the Human Capital 2004 Employer of Choice Awards for Accounting. The survey sought the views of prospective candidates to determine New Zealand’s best employers based on the following criteria:

  • salary and remuneration;
  • career development opportunities;
  • management style and structure;
  • workplace culture;
  • working environment and company resources; and
  • perception in local and (if applicable) international community.

Maintaining and enhancing our capability

This information provides an understanding of:

  • the current levels of experience of our staff in their existing or similar roles;
  • the current levels of tertiary qualifications held by our staff;
  • average time and spending on training and development;
  • pass rates for professional accreditation;
  • turnover;
  • rates of sick leave; and
  • staff satisfaction (Audit New Zealand only).

 UNIT OF MEASURE 2003-04 2002-03
EXPERIENCE
Average "time in job" OAG years 4.54 4.85
ANZ years 5.80 5.67
TERTIARY QUALIFICATIONS
No. of positions requiring tertiary qualifications OAG % 76 75
ANZ % 87 88
Staff with tertiary qualifications holding those positions OAG % 95 95
ANZ % 98 97
Staff with post-graduate qualifications OAG % 61 59
ANZ % Not reported Not reported
TRAINING AND DEVELOPMENT
Formal training spending per employee OAG $ 1,243
 1,894
ANZ $ 1,878 2,363
Pass rate of staff undertaking ICANZ accreditation ANZ % 94 100
ORGANISATIONAL HEALTH
Turnover OAG % 16.9 9.3
ANZ % 20.0 20.0
Average sick leave taken per employee OAG days 5.7 5.9
ANZ days 4.6 5.0
Staff survey results (ANZ only)
Job satisfaction
Average rating
on 1-6 scale		 4.35 4.38
Organisational satisfaction 4.50 4.55
Satisfaction with management 4.58 4.58
Understanding of vision and purpose 4.57 4.62

Additional information

Training and development

The total amount spent per employee on formal training has decreased during the 2003-04 year. In Audit New Zealand, this was due primarily to the fact that its leadership development programme was deferred over the year to ensure alignment with the Strategy and our Office-wide capability intentions. At the OAG, expenditure on leadership and management development remained at similar levels to the previous year.

The Office did however run a greater number of professional development courses than usual, including:

Audit New Zealand –

  • Coaching and mentoring skills
  • Train the trainer
  • Supervisory skills
  • Performance management
  • Auditing practices and techniques (for graduate auditors)
  • Presentation skills
  • Building business relationships
  • Audit approach to income tax
  • Directors workshop
  • Introduction to sustainable development
  • Ethical governance Improvement in the public sector
  • Health sector foundation training.

OAG –

  • Human rights and harassment
  • Media skills
  • Writing skills
  • Presentation skills
  • Health and safety
  • First aid
  • Holidays Act seminars.

Audit New Zealand staff survey

Audit New Zealand continued to invite staff perceptions on their satisfaction with the organisation on a range of dimensions. Consistent with previous years, staff rated job satisfaction, organisational satisfaction and clarity of vision and purpose highest. Lowest rated dimensions were again recognition, work /life balance and demonstration of our values.

Specific actions and targets have been included in 2004-05 team business plans to address the lowest rated dimensions.

In our Annual Plan 2004-05, we have undertaken to review and align our staff survey with our Strategy. We also intend to develop some consistent mechanism to assess Office-wide staff satisfaction.

Specific capability objectives for 2003-04

On page 43 of our Annual Plan 2003-04, we set out our specific capability objectives for 2003-04. The following table summarises our achievements and, in some cases, lack of achievement, in the implementation of our specific capability objectives for 2003-04.

SPECIFIC CAPABILITY OBJECTIVES PROGRESS
Implement and refine the revised contestability regime Completed
We have implemented the new audit resourcing model, including completion of a high level of consultation with ASPs and entities.
Implement a Communications Strategy Good progress made
Many aspects of the OAG’s Communications Strategy had already been implemented when planning began for the new Office Strategy. Further implementation was halted to enable preparation of a new Communications Strategy to cover the whole Office, and to ensure alignment with the Office Strategy. The new Communications Strategy was drafted, for implementation from 1 July 2004.
Seek opportunities to improve relationships Many successes
The Office has made considerable progress in improving its relationships – both internally and externally. Internally, the emphasis has been on – “closer working” between the OAG and ANZ. There are many examples of joint working, including an Office-wide conference for senior staff in December 2003, the use of mixed project teams to develop the Strategy and the increased sharing of resources and information.
Externally, the emphasis has been on improving collaborative working among ASPs, and the ongoing improvement in our relationships with Parliament and other key stakeholders. Again, we have many examples of success in this area. However, we have noted the need in 2004-05 to strengthen some of our “relationship capital” with key sectors, as this has been affected by our capacity issues over the past few years.
Continue to invest in Information and Communications Technology (ICT) and knowledge management systems Some successes – and disappointments
We have completed the annual upgrading of our ICT systems. In addition, we have implemented a new Financial Management Information System across the Office. We have also developed a Shared Intranet site to facilitate consistent internal communication between the OAG and ANZ on our Strategy. This will be developed further over the coming year.
However, the Audit Status Database project to enable auditors to input certain audit related data online proved unsuccessful and was abandoned to ensure that the integrity of the central database was maintained. We have subsequently verified the information and are in the process of completing specifications to re-design the system. We also did not progress development of a Knowledge Management Strategy for the Office. This was deferred until completion of the Strategy and the ISSP.

Equal Employment Opportunity (EEO) and Effectiveness for Māori (EFM)

We undertook to review our EEO Programme and EFM Plan in 2003-04. However, we did not complete this. We made a decision to defer this review until the 2004-05 year, as we wanted to ensure that the review was carried out in the context of our Strategy.

We did, however, continue to implement our existing EEO Programme and EFM Plan. Our key initiatives in 2003-04 were:

  • We continued to expand our recruitment horizons through:
    • broadening our recruitment advertising through the use of different media and locations; and
    • school visits where our Māori staff talk about their experiences.
  • We re-designed our website to show a more “human face”.
  • We continued to look for secondment opportunities both in and out of the organisation.
  • We continued to implement our strategy for developing women in preparation for movement to more senior roles. This included attendance on executive management training courses and the opportunity for women to “act” in vacant senior roles.
  • We maintained our EEO network groups, as required.
  • We continued to pilot work/life balance initiatives – e.g. one female manager works from home one day a week in an office set up by us.
  • We established a Māori Sector group to provide input to, and monitor, the EFM Plan.
  • We piloted an interactive CD ROM called “Culture Flow” with two staff. This tool provides staff with the opportunity to learn basic Māori language. It is of benefit to those staff who have Māori clients and/or cultural affiliations and/or interest in wider personal development. We will be reviewing the outcomes from the pilot in October 2004.
  • In December 2003, one Māori scholarship was awarded for the year beginning February 2004. One Pacific Island Scholarship was also awarded. There are 3 other Māori accounting scholarships currently ongoing.
  • We conducted a tender for providers in training on the Treaty of Waitangi and cultural awareness. This will be put in place in 2004-05.
  • We have purchased 10 copies of a CD called “Te Rito” which are now available in all our offices. The CD is designed to raise awareness of Māori culture, protocols, language and understanding of the Treaty of Waitangi. It is to be used as a reference to support other training and initiatives.
  • Te Puni Kōkiri have been contacted to provide seminars to Office staff nationwide. This will be progressed further in the 2004-05 year.

Adequacy of our current capability

Using the information provided on the previous pages, we have formed some conclusions about the “adequacy” of our capability to meet our current and future stakeholder needs. We have used the following key capability questions to form this view:

  • Does the Office have – or have access to – enough skilled, experienced and competent people?
  • Can the Office attract suitably qualified staff?
  • Does the Office have a ready supply of future leaders?
  • Does the Office have sufficient working capital to sustain its work?
  • Does the Office have adequate information technology to effectively perform its work?

Does the Office have – or have access to – enough skilled, experienced and competent people?

The Office has maintained its capability levels at approximately the same levels for the past three years. In developing our five-year Strategic Plan, the Auditor-General acknowledged that:

  • Our current capability (staff numbers and funding) was insufficient to deliver our existing outputs. This was particularly evident in relation to:
    • Research and development, and product development. The Office’s capability in these areas had been depleted over the past ten years, and there is a backlog of work required to meet current needs, especially in local government.
    • Major inquiries. The number and complexity of inquiries has significantly increased over the last few years. The Office has been required to divert senior resources from planned work, primarily performance audits, to respond.
  • Our ratio of operational to non-operational staff was about right. However, if increased funding was received for additional operational staff, there would be no consequential increases in the numbers of non-operational staff – with the exception of the Reports and Communications Group (who will be required to complete more reports).
  • Maintenance of the current size of our pool of contracted resources for annual audits is necessary to ensure the Office has access to a broader resource base. Under the audit resourcing model, the method for choosing auditors who carry out annual audits has changed. Through his initial allocation, the Auditor-General has sought to provide more sustainable audit portfolios to ASPs – which are now geographically and sectorally better aligned – which should better enable the ASPs to invest in development of public sector-specific auditing.

On the basis of the above, the Office has received a significant increase in baseline funding for additional staff and/or the capacity to purchase additional resources.

Can the Office attract suitably qualified staff?

A number of vacancies (6) occurred at senior levels within the Office in 2003-04, primarily due to implementation of our new leadership model (described on pages 46-47). The Office sought applicants for 4 of these positions both internally and externally, and for the remaining 2 internally only (as it considered that there were sufficient potential applicants within the Office with the required skills sets). For the externally advertised positions, we received good response rates (average 10 applicants per vacancy).

Audit New Zealand undertakes an annual recruitment drive for graduates. This occurs at or about the same time as the graduate recruitment processes of the major CA firms. In the May 2003 recruitment round, for graduates to commence work with Audit New Zealand in February 2004, Audit New Zealand received 113 applications for the 13 positions it had available nationwide. From this pool, Audit New Zealand employed 12 graduate staff. Audit New Zealand experienced difficulties in recruiting graduates in the South Island, particularly in Dunedin. Similar difficulties were experienced by the major chartered accounting firms in those locations.

Likewise, Audit New Zealand has experienced difficulties recruiting senior audit staff in the South Island. The Office is held in high regard externally, and appears to be able to attract a good level of responses to any externally advertised positions at senior levels and for graduate roles. However, the Office continues to experience difficulties in attracting staff in some locations.

Does the Office have a ready supply of future leaders?

Audit New Zealand’s Capability (Talent) Management System indicates that almost a third of all senior staff are perceived to have the potential to take on more senior roles. Of this number, 67% are perceived as being ready now or in the next 2 years. This would tend to indicate some depth in the future supply of leaders.

In addition, the average rate of internal promotions to senior positions (i.e. positions within the CMG) of 83% (i.e. 5 out of the 6 appointees to positions within the CMG were internal applicants) has demonstrated that the Office has enough suitably qualified staff ready to take on more senior roles.

Does the Office have sufficient working capital to sustain its work?

Over the 2003-04 year, Audit New Zealand has made improvements in its work in progress (WIP) and debtor management. This has resulted in a reduction in WIP and a small improvement in debtor collection. The bank balance as at 30 June 2004 has improved significantly from a year earlier, and the Office has not had to use its overdraft facility.

This tends to indicate that the Office currently has sufficient working capital to sustain its work.

Does the Office have adequate information technology to effectively perform its work?

Our recent review of our IT infrastructure confirmed that the Office has adequate information systems to effectively perform our work. However, it highlighted that these systems are under-utilised and that there are opportunities for efficiency across the Office.

Conclusions

We accordingly believe that:

  • Our capability was insufficient to meet our current and future capability needs, but this has been addressed through the provision of additional baseline funding for the next three years.
  • In general, we have adequate access to a supply of suitably qualified staff and future leaders. However, we continue to experience difficulties in some locations.
  • The Office has adequate working capital to sustain its work.
  • Our IT infrastructure is sufficient to support the work of the Office, but is under-utilised.

Quality of our current capability

Using the information provided on the earlier pages, we have formed some conclusions about the “quality” of our capability to meet our current and future stakeholder needs. We have used the following key capability questions to form this view:

  • Does the Office maintain and enhance the skills of its existing staff?
  • Does the Office create an environment where skilled people want to stay and work?
  • Does the Office effectively implement EEO and EFM?

Does the Office maintain and enhance the skills of its existing staff?

While our total spending per employee was less in 2003-04 than in the previous year, we did invest more in professional development. All core professional development programmes were implemented. In addition, a number of new programmes were provided. The main area of spending that was less was in leadership development. As outlined earlier, this was because we decided to put on hold the Audit New Zealand leadership programme so that it could be aligned across the Office with our Strategy.

We have acknowledged that our overall investment in staff development needs to be increased, and, in Audit New Zealand’s case, applied more evenly throughout the year. (Audit New Zealand is dependent on income to invest in the development of staff. Historically, this has meant that decisions about development have been deferred until the second half of the financial year, or, in some cases, traded for business viability.) In addition, as a broader consequence of the limited capacity of the Office to respond to new work and achieve its core outputs, there has been limited time for staff to undertake development opportunities.

As part of our Business Planning process, we have committed to a number of capability development initiatives. Particular areas of emphasis will be the development of individual plans, and a review of our capability development model for senior staff.

Does the Office create an environment where skilled people want to stay and work?

Staff turnover rates in Audit New Zealand have remained at similar levels (i.e. 20%) for the past two years. While this rate appears high, it is a reflection of the turnover of staff who have received ICANZ accreditation after three years of tenure and who, largely, chose to travel overseas. This is consistent within the accounting and auditing profession.

The staff turnover rate in the OAG has increased over the 2003-04 year, although from a very low level in the previous year. The present level of turnover is still unexceptional.

Results from the Audit New Zealand Staff Survey demonstrate a consistent trend, in that organisation and job satisfaction and clarity of vision and purpose remain highly rated.

Together, these results indicate a degree of satisfaction with the working environment and an intention to remain for the foreseeable future.

Does the Office effectively implement EEO and EFM?

We have started to see some improvements in the ratio of women in management positions. We have made considerable efforts during 2003-04 in targeting development for women with emerging senior leadership potential. This has included high value training and development courses, as well as the opportunity to act in senior roles. Out of 6 appointments in the last six months to positions at the level of Assistant Auditor-General, 3 were female.

Work remains to improve the representation of Māori and people from Pacific Islands in the Office. We have made some progress in implementing our Effectiveness for Māori Plan. This is outlined on pages 83-84. However, our efforts have not yet resulted in increased representation of Māori or Pacific Island staff in the Office.

Conclusions

We believe that over the 2003-04 year:

  • we have at least maintained our capabilities at our existing levels;
  • we continue to offer an environment where skilled people want to stay and work; and
  • we have made some gains in terms of facilitating diversity for women, but work remains to improve the representation of Māori and Pacific Island people.

Effectiveness of our current capability

Using the information provided on the earlier pages, we have formed some conclusions about the “effectiveness” of our capability to meet our current and future stakeholder needs. We have used the following key capability questions to form this view:

  • Does the Office have effective and efficient mechanisms to store, retrieve and share information/knowledge?
  • How skilled, experienced and competent are our people to perform their work?
  • Do our systems and processes support the work of the Office?

Does the Office have effective and efficient mechanisms to store, retrieve and share information/knowledge?

As an information-intensive organisation, we have acknowledged the need to have effective document management systems in place. We have therefore implemented such systems in the Office. Audit New Zealand and the OAG have separate systems, and neither system is yet fully effective – either because further training is required or because there are ongoing implementation and/ or user effectiveness issues. However, they do provide some building blocks for the future, and are being reviewed as part of the implementation of the ISSP.

In addition, we have not progressed the development of a Knowledge Management Strategy for the Office.

Audit New Zealand invites staff perceptions on the accessibility of its IT systems. Consistent with the previous year, staff rated this as 4.5 out of 6.

How skilled, experienced and competent are our people to perform their work?

The Office has staff with a depth of experience in their existing roles (or similar roles) and a high proportion of staff with the appropriate tertiary qualifications necessary for their role.

We received a range of feedback from our key stakeholders on their perceptions of the expertise of our staff and the quality of their relationships with our staff. This included client surveys (public entities) and the Auditor-General’s meetings with Select Committee chairpersons.

Key findings were:

  • Continuing high levels of satisfaction from Select Committee Chairpersons with the expertise of our staff and the quality of their relationships with our staff.
  • Public entities indicated that they highly value the interaction and relationships they have with senior Audit New Zealand staff, and acknowledge their skills and expertise. However, they questioned the depth of sector and business knowledge of junior staff.

Do our systems and processes support the work of the Office?

This is the second year that Audit New Zealand has surveyed the perceptions of its staff on the usefulness of its systems and processes. The rating for 2003-04 was 4.3 out of 6.

No similar survey was carried out in the OAG in 2003-04.

Because different systems and processes are in effect across the Office, there are opportunities for greater efficiencies to support more effective jointworking between the OAG and Audit New Zealand.

Conclusions

We believe that:

  • The Office has the basis for effective and efficient mechanisms to store and retrieve information. However, knowledge sharing is inhibited by different document management systems across the Office and the lack of a Knowledge Management Strategy.
  • The people who work for the Office continue to be acknowledged as effective by our key stakeholders – Parliament and public entities.
  • The usefulness and ease of access of Audit New Zealand’s systems and processes are rated at above satisfactory levels. Further work is needed to ensure consistency across the Office and to develop Office-wide reporting mechanisms in this area.

Summary

1. Did we review our future capability needs as part of the development of our Strategic Plan?

We believe that we have comprehensively reviewed our future capability needs as part of the development of our five-year Strategic Plan.

As a result, we have secured additional Parliamentary funding for increased capability/capacity to respond to the challenges in our environment and to better meet our stakeholder needs.

2. Did we enhance our capability?

Overall, we are of the view that we at least maintained our capability at its existing levels.

In relation to the specific capability objectives the Office had for 2003-04:

  • The Office did implement its revised contestability regime.
  • Implementation of the 2003-04 OAG Communications Strategy was well under way, but was halted so that a new Communications Strategy could be drafted for the whole Office, to align with the new Office Strategy from 1 July 2004.
  • We had many successes in improving relationships – internally and externally.
  • We continued to invest in ICT. However we had a notable disappointment in the upgrading of our Audit Status Database, and we did not progress our Knowledge Management Strategy.
  • We did not review our EEO Programme and EFM Plan, but we continued to implement the existing strategies

3. Did we improve our own measurement and reporting of capability?

We believe that we continued to make good progress in the development of our measurement and reporting of capability. This Annual Report is an enhancement on the level of reporting provided in the previous year, and is intended as a model of good practice capability reporting.

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