New Zealand Trade and Enterprise: Administration of grant programmes - follow-up audit

New Zealand Trade and Enterprise (NZTE) helps New Zealand businesses to expand and succeed in the global economy. It uses grant and awards programmes to support the development of internationally competitive business performance.

Our 2008 report followed up on a 2004 performance audit of NZTE's administration of grant programmes. The 2004 performance audit was part of a series of performance audits of grants programmes that we have been carrying out. The 2008 follow-up report aimed to provide assurance to Parliament about whether NZTE had responded appropriately to the recommendations we made in 2004, and whether it is effectively and efficiently administering its grant programmes in keeping with the Government's intentions.

The scope of our follow-up audit

We audited the extent to which NZTE had addressed the areas of concern identified in our 2004 report. In the foreword to the 2004 report, the Auditor-General concluded:

NZTE has not yet established a framework to ensure that, for each grant programme, consideration has been given to important aspects of grant administration, including the assessment of risk, data collection and reporting, documentation, and monitoring practices.

Our 2008 follow-up report sampled individual grants from three grant programmes in the 2005/06 and 2006/07 financial years. To audit these programmes, we grouped the 47 recommendations made in our 2004 report into six themes. These themes were:

• an overall framework for administering grant programmes;
• guidance for interpreting, and adhering to, government criteria for grant programmes;
• quality of data collection and reporting;
• documentation standards and guidance;
• assessment of risk; and
• monitoring of grants.

Our findings

NZTE had responded appropriately to the recommendations we made in our 2004 report. We did not find it necessary to make any formal recommendations in our 2008 follow-up report. However, we suggested some minor improvements that NZTE could make to its grant administration processes. We suggested that NZTE provide its staff with more guidance about assessing risk to ensure consistent risk assessment. We also suggested that NZTE make greater use of its electronic client management system to record monitoring contact with grant recipients and to track whether the recipients were meeting reporting requirements.

The response to our findings

NZTE viewed the positive findings of our 2008 audit as recognition of the results of a major business improvement project it had carried out since 2004 to improve its administration of grant programmes. NZTE supported our suggestions for minor improvements and said it would incorporate them as part of ongoing refinements to its processes.

Since 2008, NZTE has substantially changed its grant programmes. The three grant programmes that we examined for our 2008 follow-up audit no longer exist. These programmes have been combined to form a new single flexible fund – the International Growth Fund. Many of the suggestions for improvement we made in our 2008 report were specific to the grant programmes we examined and are not relevant to this fund. However, there were some suggestions still relevant to the administration of NZTE's grant programmes in general. From the information NZTE has provided to us, we are satisfied that NZTE has incorporated these suggestions into its processes.

In remodelling its grant programmes, NZTE has made improvements that include:

• Streamlining the grant administration processes by using information already held on a business to assess its eligibility for funding. This makes the process less burdensome for businesses.
• Incorporating risk assessment as a central part of assessing a business's eligibility for the International Growth Fund. A template used to collect information about a business for funding assessment also provides guidance about risk. NZTE is also creating guidance for supporting documents. NZTE will provide training for staff on risk awareness for this fund.
• Providing guidance to staff on interpreting Cabinet criteria and introducing templates that ensure appropriate documentation of decisions relating to the criteria.