Auditor-General's overview and strategic direction

This is my Annual Plan for 2010/11, which I am required to prepare under the Public Audit Act 2001. It includes the Statement of Intent information that I prepared under the Public Finance Act 1989 and which is contained in the 2010/11 Estimates of Appropriation. It also incorporates my proposed work programme for 2010/11, on which I sought feedback from the Speaker and select committees.

Major influences on our work in the next three years

There is no question that the Auditor-General's role and vision to improve public sector performance are of heightened importance to New Zealand at present.

Although most Kiwi households have managed to ride out the global recession, there has been a major, lasting effect on core government. Public revenue is down, and we are experiencing a level of national debt similar to the 1980s that will probably see the country's Budget in deficit for much of my term as Auditor-General. There will be continuing pressure on the public sector to do more with the same or less, greater concern about performance and value for money, and a stronger focus on safeguarding public assets and services.

International demands for changes to auditing and accounting standards and the mobility of the audit workforce continue to affect us as part of the international audit community, and we have major new challenges at home such as providing audit assurance over the amalgamation of eight local authorities into a single Auckland "super" council.

As a result, my Office – which includes the Office of the Auditor-General, Audit New Zealand, and all other audit service providers who carry out audits on my behalf – will be expected to:

• pursue avenues to improve the public sector while maintaining independence;
• improve the flow and analysis of our collective knowledge; and
• provide assurance over the soundness of management decisions in the public sector.

All of the Auditor-General's resources will need to work together even more effectively for the Office to provide the assurance, guidance, and leadership that will help to ensure that public money is used wisely.

Our Strategy

In this context, the Office's current Strategy is on the right track for the next two to three years. We will continue to build our own capability and to work on our three main strategic objectives to:

• better understand public entities;
• better use the full range of our resources; and
• better customise our reporting.

However, there will be some changes of emphasis so that we fully use the five aspects of the legislative audit model (authority, waste, probity, performance, and accountability) to report on matters that will help to improve public sector performance.

For the duration of my term as Auditor-General, I expect the Office to maintain high quality work, independence, and good relationships based on respect by:

• listening to and knowing our clients, our stakeholders, and the public sector so that we understand their expectations and the context for our work, and know the effect of our work;
• building our individual and collective expertise, experience, and judgement so that we can strengthen our contribution to improving public sector performance;
• working together (internally and externally) to integrate and focus our knowledge so that we get and give the most value from what we know and have an effect on the big issues; and
• adapting our ways of working to get results out when the matter is current and in a form suiting the audience so that our work has the best chance of having a positive influence.

Consultation with Parliament

Consultation with Parliament has helped me to ensure that the work done using my discretionary audit reporting powers will be relevant and useful to Parliament, public entities, and the public. It is an important way in which I can continue to ensure that the work of my Office remains relevant and responsive to the needs of my key stakeholders – Parliament and the public. The feedback I have received mainly supported the proposals I have made and the approach I have taken in determining my proposed work programme, with a specific suggestion made for future years being the performance of the New Zealand Police in road safety enforcement.

I am aware that the wider environment is one of rapid change influenced by the economic conditions we are currently experiencing, which in turn changes the priorities of the Government. My Office has put considerable thought and development work into preparing the proposed work programme within my Annual Plan. However, in this wider environment, I will consider amending specific proposals or substituting other work should the need arise.

Concluding comments

I do not underestimate the effect of changing emphasis and adding new work and complexity on top of doing better with what we have. The Office already has challenging roles, and our level of commitment to doing a good job is high. I am confident that this approach will enable us to build on our good reputation, and that we will be known for:

• providing expert and regular assurance on the activities and financial performance of public entities;
• improving public management;
• our expertise in public management and auditing;
• meeting expectations; and
• knowing the effect of our work.

Lyn Provost
Controller and Auditor-General

16 June 2010