Appendix 1: Summary of reports on performance audits and other studies published in 2006/07

1. Residential rates postponement (September 2006)

Rates postponement policies allow ratepayers to defer paying their rates, with the debt being secured against the equity in their property. A group of councils has formed a consortium to offer optional rates postponement to older ratepayers with enough equity in their homes. In addition, some councils offer rates postponement to ratepayers suffering financial hardship. Our audit examined the design and administration of six councils’ rates postponement policies. Overall, councils’ rates postponement policies are well designed, and councils are administering them in the interests of their communities. However, we identified some areas where councils could clarify their rates postponement policies and procedures.

2. Inland Revenue Department: Performance of taxpayer audit - follow-up audit (October 2006)

The Inland Revenue Department (IRD) carries out taxpayer audits to ensure that taxpayers comply with appropriate taxation law and regulations. In 2006/07, IRD expected to assess $828 million of additional tax as a result of audits conducted across all taxpayer groups. Our 2003 audit of taxpayer audit concluded that much of what was needed for taxpayer audit to play its full part in the Taxpayer Compliance Model was not in place, the scale of change needed was substantial, and IRD required a significant programme to manage the change. We audited IRD in 2006 to see what progress it had made in implementing the recommendations in our 2003 report. IRD had made significant progress in implementing our recommendations, which had resulted in considerable changes in the operation of taxpayer audit. We expect IRD to continue to maintain and improve its performance.

3. Advertising expenditure incurred by the Parliamentary Service in the three months before the 2005 General Election (October 2006)

We carried out an inquiry into expenditure on advertising and publicity material paid for by the Parliamentary Service in the three months before the General Election on 17 September 2005. The focus of the inquiry was whether the expenditure incurred by the Service was lawful. We concluded that, to the extent that the material considered was electioneering material, the expenditure was in breach of appropriation. Accordingly, the Auditor-General directed the Minister responsible to report the breaches identified to the House of Representatives. The direction was issued under section 65Z(1) of the Public Finance Act 1989.

4. Allocation of the 2002-05 Health Funding Package (November 2006)

We carried out this audit to provide Parliament with a better understanding of where the Health Funding Package had been allocated between 2002 and 2005. We found the Ministry of Health had good documentation to support decisions on allocating the Package and that the Package had been allocated in accordance with Cabinet authority. However, it was not possible to say from this audit how the Package was ultimately spent by district health boards and Ministry directorates, because district health boards and many Ministry directorates did not keep separate records of Package funds. We also found the aim to cap new funding available to the health sector through the Package had not been achieved, with additional funding appropriated for the health sector from outside the Package.

5. Performance of the contact centre for Work and Income (December 2006)

We audited the performance of the contact centre for Work and Income. The contact centre’s management systems follow industry good practice, and the contact centre is well integrated with the rest of Work and Income. We recommended improvements in the way the contact centre measures and reports on the service it provides to callers, and the preparation of an annual business plan. The contact centre has implemented our recommendations.

6. Controlling sensitive expenditure: Guidelines for public entities (February 2007)

We developed guidelines to help public entities improve, where necessary, their organisational approach to, and control of, sensitive expenditure. Sensitive expenditure is expenditure that could be seen as giving some private benefit to an individual staff member that is additional to the business benefit to the entity of that expenditure. Travel, accommodation, and hospitality spending are examples. Public entities incur sensitive expenditure to help them achieve their objectives. The guidelines represent our view of good practice for controlling sensitive expenditure. We may use the guidelines when carrying out future audits or inquiries.

7. Department of Internal Affairs: Effectiveness of controls on non-casino gaming machines (February 2007)

We examined how the Department of Internal Affairs administers controls on non-casino gaming machines. The review focused on controls on licensing machine operators and venues, on operator and venue costs, and on the distribution and application of funds to the community. We found that the Department’s approach to compliance was still emerging, but that the fundamental elements were in place. However, the Department needs to make several improvements, and the report contained 17 recommendations for the Department to consider. Recommendations included ensuring that its policies and procedures comply with the Act, and needing more information on the level of compliance in the industry to assess the Department’s success in contributing to the industry’s compliance with the Act.

8. Waste management planning by territorial authorities (May 2007)

The Local Government Act 1974 requires all territorial authorities to adopt a waste management plan to provide for waste management in their district. Our audit reviewed whether every territorial authority had adopted a waste management plan, and checked whether six selected territorial authorities were implementing their waste management plans. We also considered three case studies looking at particular approaches to managing solid waste.

We found that every council had prepared a waste management plan, although some plans were out of date or did not contain all the information we expected. In many cases it was not clear whether the plans had been formally adopted.

The six territorial authorities we reviewed in more detail were progressively implementing their plans. Several of them had improved their plans and practices through self-review.

The three case studies highlight the need for territorial authorities to carefully evaluate the requirements and the implications of pursuing particular waste management practices before implementing them. Most of the territorial authorities we looked at as case studies had done this.

9. New Zealand Qualifications Authority: Monitoring the quality of polytechnic education (May 2007)

Our report examined how the Board of the New Zealand Qualifications Authority (NZQA) ensured that there was effective auditing of the quality of the education provided at polytechnics. The quality auditing of polytechnics had been delegated by the Board of NZQA to another agency. Our report found that there were sound auditing systems in place, but that the Board of NZQA needed to be better informed about the outcomes of the audit work being carried out on its behalf.

10. Te Puni Kōkiri: Administration of grant programmes (May 2007)

This audit was the third in a multi-year series we have carried out to examine how effectively grant programmes are administered by public entities. We found that Te Puni Kōkiri has some good systems in place for administering its grant programmes, but that there were several areas for improvement. These include improved documented monitoring of actual expenditure and progress against contract milestones for funded projects.

11. Sustainable Development - Implementing the Programme of Action (May 2007)

The Sustainable Development Programme of Action sought real change in the way central government works, including how it works with local government. We audited the leadership and co-ordination, planning, implementation, and evaluation and reporting of the Programme of Action as a whole, and of two of its four workstreams. Although a lot was achieved in the separate areas of focus for the Programme of Action and most of our expectations were met, our expectations for some aspects of planning and reporting to the public were not fully met. We identified some implications for central and local government in areas such as governance, management, and accountability. Our intention was to provide timely information to those who are working in cross-agency collaboration.

12. Assessing arrangements for jointly maintaining state highways and local roads (June 2007)

We looked at how well three collaborative agreements between Transit New Zealand (Transit) and district councils for jointly maintaining state highways and local roads were working, and what cost savings and other benefits they were bringing. Our overall conclusion was that collaborative agreements between Transit and district councils can be an effective means of maintaining state highways and local roads. The district councils were getting greater savings and more non-financial benefits than Transit from the agreements. From Transit’s national perspective, there were significant drawbacks to collaborative agreements, although it had not thoroughly assessed these and the merits of current collaborative agreements. To avoid the risk of discounting collaborative agreements as a potentially viable and worthwhile option for managing and maintaining state highways and local roads, Transit needed to more fully assess the value of current collaborative agreements.

13. Ministry of Health and district health boards: Effectiveness of the “Get Checked” diabetes programme (June 2007)

The “Get Checked” programme was set up in June 2000 to help people who have been diagnosed with diabetes better manage their condition and lower the risks of complications. District health boards are responsible for the programme and ensuring that it is delivered in their districts. Our audit assessed the extent to which the programme’s objectives were being met. We found that the programme has resulted in improvements. However, to make the programme more effective, improvements need to be made to the quality of programme data and how the data is used. Better use can be made of the data to inform the provision of diabetes care at primary and secondary care levels. More evaluation should be carried out using the programme data to better understand how the programme and other factors contributing to diabetes are linked, and to identify further improvements in how diabetes is managed.

14. New Zealand Customs Service: Collecting customs revenue (June 2007)

The New Zealand Customs Service is responsible for collecting about 15% of the Government’s total forecast revenue for 2006/07. We conducted a performance audit that assessed the Service’s arrangements for collecting customs duties, excise, and Goods and Services Tax on imported goods. Although we made recommendations for improvement, we were satisfied that the Service’s arrangements for collecting customs revenue were sound, and that its information technology systems were performing effectively. The Service needs to improve its performance measures to reflect the quality and outcome of its performance. This is a deficiency that the Service has in common with other entities we audit, and is one that we would like to see remedied. We were pleased that the Service had already identified this matter for serious attention.

15. The Department of Labour: Management of immigration identity fraud (June 2007)

We conducted an audit to assess the effectiveness of the Department of Labour’s systems, processes, and procedures for managing people who seek to enter New Zealand with a false identity as skilled migrants or United Nations quota refugees. Our audit looked at how the Department prevents, detects, and investigates instances of identity fraud with those two entry categories. Although we found that there were systems, processes and procedures, and relationships with external stakeholders in place, there were several areas where improvements need to be made. These include the need to identify immigration fraud risks specific to the two entry categories considered as part of our audit; prepare a plan to manage those risks; provide appropriate training, guidance material, and IT support systems for relevant staff; and regularly evaluate the effectiveness of the Department’s prevention, detection, and investigation activities.

16. Effectiveness of the New Zealand Debt Management Office (June 2007)

With the assistance of technical experts from KPMG, we carried out a performance audit of the New Zealand Debt Management Office (NZDMO), a unit within the Treasury. NZDMO is responsible for the efficient management of the Crown’s debt and associated financial assets within an appropriate risk management framework. Our audit did not find any fundamental concerns with the performance of NZDMO. It identified that NZDMO has made appropriate adjustments to its operating framework as the Crown’s fiscal position has changed. The audit also identified areas of governance, risk management, portfolio management policy, and performance reporting where NZDMO could make some further improvements.

17. Statements of Corporate Intent: Legislative compliance and performance reporting (June 2007)

We examined the compliance of a range of public entities with their legislative requirements to produce a statement of corporate intent, and then report in their annual report against performance measures set in the statement of corporate intent. Entities examined included Crown Research Institutes, energy companies, port companies, and State-owned enterprises. We also included council-controlled organisations and council-controlled trading organisations, which are required to produce statements of intent, since their legislative requirements are very similar to those for statements of corporate intent. Our audit found broad legislative compliance, but we also identified several cases of non-compliance. There was also mixed quality of targets used by some entities to measure, and report against, their performance.

18. Managing conflicts of interest: Guidance for public entities (June 2007)

This publication provides general guidance about conflicts of interest for anyone who works with or for a public entity. It explains how to understand conflicts of interest in a public sector context, and how to identify, disclose, and manage them. It sets out the Auditor-General’s view of what constitutes good practice in the public sector. It considers both the legal and ethical dimensions of conflicts of interest, and includes a series of case studies.

19. Guidance for members of local authorities about the law on conflicts of interest (June 2007)

This publication contains specific guidance about conflicts of interest for members of the governing bodies of local authorities (and those other organisations that are subject to the Local Authorities (Members’ Interests) Act 1968). This guide is an updated version of previously published guidance about the legal requirements about conflicts of interest that apply to local authority members in formal decision-making at meetings of their authority. It is focused on the application of relevant statutory and common law rules to members in a local government context.

20. Matters arising from the 2006-16 Long-Term Council Community Plans (June 2007)

The Local Government Act 2002 requires local authorities to prepare Long-Term Council Community Plans (LTCCPs), and the Auditor-General to audit them. The report outlines the results of the audits of the LTCCP Statement of Proposal and its Summary (used for community consultation), and of the final LTCCP adopted by an authority. It also includes an external review by four experts in the areas of sustainable development, performance information, asset management information, and financial management and strategies. The report is intended to assist local authorities in improving their next LTCCP for 2009-19.

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