Performance audits from 2007: Follow-up report.

This report to Parliament sets out the actions taken in response to the findings of the 14 performance audits we completed in 2007. We are publishing this report to Parliament now because entities have had a reasonable length of time to respond to the findings of the performance audits we completed during 2007.

The work we do provides Parliament with independent assurance that public sector organisations are operating, and accounting for their performance, in keeping with Parliament’s intentions. This includes assurance about the activities and operations of local government – local authorities and the entities they control.

This independent assurance is provided through the reporting set out under the Public Audit Act 2001 and other statutory requirements:

  • annual financial audits and other audits of public entities;
  • our Controller work, including the appropriation audit;
  • performance audits and other studies;
  • responding to enquiries from ratepayers, taxpayers, and members of Parliament; and
  • approvals under the Local Authorities (Members’ Interests) Act 1968.

Annual audits, other audits of public entities, and the Controller work are statutory requirements. The performance audits we carry out are part of our discretionary work.

What is a performance audit?

A performance audit is a significant and in-depth audit covering issues of effectiveness and efficiency. It provides Parliament with assurance about specific issues or programmes and their management by the relevant public entity or entities.

Our mandate allows us to carry out performance audits of all public entities, including central government departments, local authorities, schools, district health boards, and the defence force.

Performance audits are carried out under section 16 of the Public Audit Act. A performance audit can examine:

  • how effectively and efficiently a public entity is working;
  • whether a public entity is complying with its statutory obligations;
  • any act or omission that might waste public resources; and
  • any act or omission that might show (or appear to show) a lack of probity or financial prudence by a public entity or one or more of its members, office holders, or employees.

The product of a performance audit is usually a report to Parliament that will identify good or emerging practices, raise any issues or concerns, and (where necessary) recommend improvements to the public entity’s performance. All our performance audit reports are available on our website (, and distributed free when people request a copy.

Public entities decide whether they accept and how to implement our recommendations. In most cases, public entities welcome the independent advice given by our auditors, and seek to make the improvements we suggest. In other cases, public entities adopt alternative approaches that address the issues underlying our recommendations, and we welcome this initiative.

There are also times where the passage of time or changes in circumstance means it no longer makes sense to implement the recommendations as we originally wrote them. Sometimes, our recommendations are not given priority or the entity’s management finds them in some way unsatisfactory.

Monitoring responses to performance audit findings

We follow up on the responses made to our performance audits, and the progress public entities have made in implementing our recommendations, to ensure that our work has a positive influence on the public sector. We follow up on the responses to our performance audit findings in several ways, including:

  • informally discussing progress during regular annual financial audits and relationship meetings with public entities;
  • receiving formal briefings from the management team of a public entity on their progress in implementing our recommendations;
  • requesting written feedback from public entities on their response to our performance audit reports;
  • providing information to select committees on our performance audit reports and suggesting lines of enquiry for committees to question public entities about their response;
  • following up, during the annual financial audit, on the issues raised in the performance audit; and
  • carrying out a formal follow-up performance audit to find out whether the issues identified in our performance audit have been or are being resolved.

In most cases, the information presented in this report is based on the relevant public entity’s representation of the action it has taken, and what we have learned during our continuing discussion with the entity. While we have performed no formal audit work to verify the accuracy of the information reported, we are satisfied that the information included fairly reflects, as at December 2008, the responses to our performance audit reports.

Responses to the findings of our performance audits

Overall, we are satisfied with the responses to the findings of the performance audits we completed during 2007.

Except in a few instances, the relevant public entity accepted (or partially accepted) our recommendations. We made 131 recommendations in the performance audit reports we published during 2007, and have information on the response to 110 of these. Of the 110 recommendations, 108 have been accepted or partially accepted.

Of the 110 recommendations we have information on, 76 (69%) have been implemented. A further 27 recommendations are expected to be implemented within the first half of 2009 – this would bring the number of recommendations implemented to nearly 94%.

We will continue to monitor progress within the relevant entities where implementation appears to be slow, if we have continuing concerns, or where the issues are of great importance.

We will be following up with entities about the 21 recommendations where we do not yet have full information on the response to the findings of our performance audit.

Structure of this report

For each of the performance audits we completed during 2007, we set out:

  • brief background information;
  • an outline of the scope of the audit;
  • a summary of our audit findings; and
  • the response to our audit.

The information is presented by the title of the performance audit report that we published, and grouped by select committee1 for the convenience of the Finance and Expenditure Committee. That Committee may choose to forward this report to other appropriate select committees.

1: The exception is our report on statements of corporate intent, which spans more than one committee.

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