Part 11: Status of follow-up action on previous reports

Central government: Results of the 2003-04 audits.

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).

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

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.

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.

This part gives a brief analysis of each of our performance audit reports published since June 2003. It follows a similar format to the comments that we have published in each of the past 3 years1 about follow-up action on our previous reports, with updated comments as appropriate.

Our reports on local government issues and one-off inquiries are not included in this article.

Management of Hospital-acquired Infection

Date presented: 25 June 2003

Brief description

Hospital-acquired infection (HAI) is 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. The extent of HAI can be reduced through effective infection control practices.

The purpose of our performance audit was to describe and assess systems for managing hospital-acquired infection in public hospitals. The performance audit was reported in two volumes.

Key findings and recommendations

We found that some dimensions of infection control are working particularly well – such as collaboration between infection control staff 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 made 39 recommendations about areas such as:

  • the national framework for infection control;
  • national surveillance of hospital-acquired infection;
  • improving planning, resourcing, reporting and oversight of infection control by District Health Boards (DHBs); and
  • scope and co-ordination of hospital infection control arrangements and staff compliance with infection control polices and practices.

Impact of our report

In October 2003, we presented our report to the Health Committee. We also presented our report to the National Infection Control conference in Dunedin, and our input has been sought by DHBs on the issue.

As a result of the performance audit, the Health Committee carried out an inquiry, the results of which were reported to Parliament on 6 May 2004. In its report, the Committee said that it considered the implementation of our report’s recommendations to be essential to reassure the public about the safety and quality of public health in New Zealand. It supported a national surveillance programme for HAI, and sought consistency in collation and reporting of blood stream infection data, as well as better public information about HAI in their hospitals.

The Ministry of Health has put in place a response plan that is being monitored by the Select Committee and by us. We are continuing to monitor the work occurring to improve infection control practices in hospitals.

Inland Revenue Department: Performance of Taxpayer Audit

Date presented: 6 August 2003

Brief description

Each year the Inland Revenue Department (the IRD) audits thousands of taxpayers to detect non-compliance with tax laws, and to deter potential non-compliance in the future. 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 the taxpayer audit function was under-developed. The IRD agreed, and has initiated a number of projects to improve the situation.

We recommended that the IRD’s strategy for taxpayer audit needed to be further developed. Other particular recommendations included:

  • implementing best practice case management techniques;
  • improving formal ongoing training of investigators;
  • reviewing the availability and use of information technology; and
  • improving the measuring and reporting of performance to Parliament.

Impact of our report

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

The IRD acknowledged that there were a number of changes to be made in the area of taxpayer audits. Many of these changes had been progressed by the time our report was published. The IRD has an extensive Audit Strategy Programme in place to fully implement all our recommendations. We meet with the Programme Manager regularly to assess progress made in implementing our recommendations. We also attend meetings of the Business Initiative Governance Board, which is overseeing the changes to taxpayer audit, as an observer when required.

We are satisfied with the progress made, and intend to conduct a follow-up audit in 2 years’ time.

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 Courts2, and the Department of Corrections.

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.

Key findings and recommendations

We identified many examples of good practice across the sector, and a strong commitment to sharing information and collaboration. At the same time, the impact of one agency’s plans or activities on the other agencies in the sector had not always been well understood.

Our recommendations included:

  • In the area of strategic planning, the criminal justice agency chief executives should support the Chief Executives Forum by attending all meetings.
  • Agencies should improve collaboration in policy development and between research units.
  • A key role for the Ministry should be to oversee the status of information technology systems in the sector, and to evaluate sector-wide impacts of any planned changes.
  • All justice sector agencies should consider establishing Māori advisory groups.
  • 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.

Impact of our report

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

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 completed an analysis of our report, highlighting the recommendations and action taken by sector departments. Justice sector chief executives have considered the analysis. We understand that, while the chief executives generally found the comments in the report useful to reflect on, not all of the recommendations were agreed to.

Managing Threats to Domestic Security

Date presented: 30 October 2003

Brief description

Threats to domestic security include threats from terrorism, cyber attack on major information or business systems, attacks against critical physical infrastructure (such as the public water supply), and events which are likely to threaten the country’s economic and social well-being (for example, an outbreak of foot and mouth disease).

Our audit set out to provide assurance to Parliament and the public that threats to the country’s domestic security were being adequately managed.

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. However, our audit identified the following issues that needed to be addressed:

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

Impact of our report

The Foreign Affairs, Defence and Trade Committee considered our report on 20 November 2003.

Over the last 12 months, the Department of the Prime Minister and Cabinet has been working to address the issues that it identified from our report. We have had six-monthly meetings with the Director of the Domestic and External Security Group, and we are satisfied that appropriate action continues to be taken to address these issues.

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. In April 2001 a Committee of Inquiry, set up to look into the under-reporting of cervical smear abnormalities in the Gisborne region, made 46 recommendations to the Minister of Health. This was our second report in relation to the implementation of those recommendations.

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.

Our report of 8 December 2003 commented on 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

We found that:

  • 31 of the 46 recommendations had been implemented or were expected to be implemented by June 2004; work had been planned or begun on 8 recommendations;
  • work had begun on a further 4 recommendations relating to ethics committees, but it was unclear whether they would be implemented;
  • 2 of the recommendations would not be implemented; and
  • the Ministry was still to decide whether the last recommendation would be implemented.

We also reported on the need:

  • to ensure that appropriate assurance processes are in place around the quality aspects of the Programme;
  • for the National Screening Unit to be more open and collaborative with stakeholders, and to ensure that all key staff positions are filled; and
  • for an independent expert to continue to review implementation of the Committee of Inquiry recommendations, and to focus on the effectiveness of the whole Programme.

Impact of our report

Our report gave assurance in respect of 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.

The Health Committee considered our report in December 2003. The Committee indicated that the review was timely, given its consideration of the Health (National Cervical Screening Programme) Amendment Bill (subsequently enacted, and assented to on 7 March 2004). This legislation provides, among other things, for independent review of the Programme at least once every 3 years.

We maintain contact with the National Screening Unit regarding the implementation of our recommendations. We were pleased to note that the audit of invasive cervical cancer has now been completed and did not identify evidence of systematic failings in New Zealand cytology laboratories.4

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. In addition, beneficiaries can suffer hardship when payments are made incorrectly.

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.

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, and we made a number of recommendations. These include that the Ministry:

  • 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;
  • 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 over-payments;
  • continues to explore the collection and analysis of information on errors and their size and causes; and
  • periodically undertakes exercises to estimate the number of people who are potentially eligible for social security assistance but who have not applied.

Impact of our report

The Social Services Committee considered our report in February 2004, and questioned Ministry staff about various matters identified in the report.

The Ministry has formally responded to us setting out the progress that it has made in addressing the recommendations in our report. The Ministry’s view is that it has made good progress in addressing the recommendations. We will maintain an active interest in the issues raised in our report, and intend to assess the Ministry’s progress in implementation of the report’s recommendations in the coming year.

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

Date presented: 30 January 2004

Brief description

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’ Māaori 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.

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.

Our recommendations included:

  • clarifying the respective roles of the Commission and Te Puni Kōkiri to resolve any potential confusion;
  • that the Commission consider evaluating the impact of its overall coherent strategy in this area; and
  • that the Commission take steps to clarify and formalise its relationships with chief executives and their departments.

Impact of our report

The Māori Affairs Committee considered our report in February 2004, and the Government Administration Committee considered it in April 2004.

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.

We will maintain an active interest in the issues raised in our report. We are conducting a similar performance audit in respect of the Treasury, with the intention that this will be published in 2005-06.

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

Date presented: 26 March 2004

Brief description

We investigated the effectiveness of the client service provided by:

  • the Māori Land Court Unit (an administrative unit of 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).

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 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 delay in the 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.

Impact of our report

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

Accident Compensation Corporation: Case Management of Rehabilitation and Compensation

Date presented: 29 April 2004

Brief description

The Accident Compensation Corporation (ACC) was established when New Zealand introduced a comprehensive no-fault accident compensation scheme in 1974. The private rights of individuals to sue for personal injury were replaced with a public scheme of universal coverage that aimed to provide compensation for all accidents, wherever they occurred.

An audit of the efficiency and effectiveness of ACC’s case management processes and procedures was proposed in our 2002-03 Annual Plan. After preliminary scoping work at ACC, the audit was focused on ACC Branches (as opposed to the Service and Contact Centres), because this is where case management occurs for the most seriously injured and long-term claimants.

Key findings and recommendations

Our report represented an independent view of the compliance of ACC’s operational structures, systems, and processes with key legislative requirements. The report also provided Parliament and the general public with information on ACC’s activities.

During our audit we encountered polarised views of ACC’s performance, although there was a consistently strong theme that the organisation was performing better then than it had in the past. Overall, we found no systemic failings in ACC’s case management practices. However, we identified areas where improvements could be made for the benefit of both ACC and claimants. We made 17 recommendations, based mainly around:

  • better use of tools to assist case managers;
  • tailoring of Individual Rehabilitation Plans;
  • reporting of Key Performance Indicators;
  • case manager induction, monitoring and assessment;
  • communication with claimants, particularly former Catalyst claimants;
  • analysing the outcomes of complaints, reviews and appeals with a view to improving policies and procedures; and
  • accurate reporting of claimant satisfaction rates and differences between groups of claimants (e.g. short-term and long-term).

Impact of our report

After the report’s publication, members of the Transport and Industrial Relations Committee considered our report. We also met with the ACC Ministerial Advisory Group, and asked various other stakeholders to gauge the report’s impact.

Soon after publication of the report, ACC provided us with a memorandum detailing its response to each of the report’s recommendations. ACC indicated that, with the exception of several actions to be completed during the 2004-05 year, all recommendations had been implemented. We remain in contact with ACC to follow progress with the outstanding actions from the audit.

New Zealand Trade and Enterprise: Administration of grant programmes

Date presented: 7 December 2004

Brief description

New Zealand Trade and Enterprise (NZTE) was established in July 2003 as a result of a merger between Industry New Zealand (the Government’s economic development agency) and Trade New Zealand (the Government’s trade promotion agency). NZTE administers a range of grants and awards to firms, sectors and regions in order to promote economic development in New Zealand.

Our audit examined whether the following grant programmes were being administered effectively and efficiently, and in keeping with the policy parameters set by Cabinet:

  • Growth Services Fund;
  • Enterprise Development Grants;
  • Enterprise Network Grants;
  • Major Events Fund; and
  • Strategic Investment Fund.

Key findings and recommendations

During the course of our audit, we found:

  • variable data collection and reporting practices;
  • variable standards of documentation;
  • an inconsistent approach to the assessment of risk; and
  • inconsistent approaches to monitoring.

We recommended that NZTE review all its grant programmes to ensure that it is administering them appropriately. For all grant programmes, this includes ensuring that a sound set of administrative principles and standards are applied.

Impact of our report

NZTE undertook a number of initiatives to improve its administration of grant programmes during the course of our audit.

The Foreign Affairs, Defence and Trade Committee considered our report in February 2005.

We will maintain an active interest in the issues raised in this report. We have agreed to meet with NZTE on a regular basis to discuss the progress being made to address the matters raised in our report.

We intend to conduct a follow-up audit of NZTE in two years’ time to determine if our recommendations have been implemented and to what effect.

We also intend to undertake, every year, a similar audit of grant programmes that are administered by other public entities.

New Zealand Trade and Enterprise: Administration of the Visiting Investor Programme

Date presented: 7 December 2004

Brief description

The Visiting Investor Programme (VIP) is a managed visit programme for companies and individuals who are considering New Zealand as a location for establishing all or part of their operations. It targets investment that will create jobs (particularly higher value jobs), provide profitable and sustainable export market access, and introduce new technology and management expertise in specific sectors.

We examined NZTE files to determine whether:

  • robust and appropriate policies and procedures were in place;
  • these policies and procedures were being followed; and
  • there was appropriate monitoring and evaluation of payments.

Key findings and recommendations

Investment New Zealand did not have comprehensive and clearly established policies and procedures for administering the VIP.

We expected that all expenditure incurred under the VIP would comply with appropriate policies, be well documented, and be approved by the relevant authority. However, there were no policies governing what types and levels of expenditure were appropriate under the VIP as a whole, and no procedures for applying the policies when preparing itineraries for specific visits.

We recommended that New Zealand Trade and Enterprise create guidance that sets out clearly the types and levels of expenditure acceptable under the Visiting Investor Programme, and enable expenditure to be incurred on a basis that is appropriate in each particular case, having regard to the purpose of the visit and the desired investment outcome. Such guidance should also specify the appropriate expenditure for officials when accompanying visiting investors.

Impact of our report

NZTE has told us that it is reviewing and updating its guidelines for the VIP to include guidance on the types of expenditure that will be approved under the VIP and what costs are eligible.

The Foreign Affairs, Defence and Trade Committee considered our report in February 2005. The Commerce Committee has indicated that it will consider our report in March 2005.

We will maintain an active interest in the issues raised in this report. We have agreed to meet with NZTE on a regular basis to discuss the progress being made to address the matters raised in our report.

1: Central Government: Results of the 2002-03 Audits, parliamentary paper B.29[04a], pages 77-103; 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: The Department for Courts was merged into the Ministry of Justice from 1 October 2003.

3: Ministry of Health: Progress in Implementing the Recommendations of the Cervical Screening Inquiry, ISBN 0-477-02890-X.

4: Cervical Cancer Audit Report – Screening of Women with Cervical Cancer, 2000-2002, Ministry of Health, 2004.

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