Part 1: Introduction
1.1
We decided to prepare this document for the members of the Transport and Industrial Relations Committee because we know that our role in auditing all of the public entities in the transport sector gives us a unique perspective.
1.2
This document:
- gives an overview of the role of the Auditor-General and outlines the kind of advice and support that you can expect from us;
- provides a description of the transport sector and its strategic significance; and
- describes our work in general and, specifically, in the transport sector.
1.3
We provide information about the entities, funding, main assets, and some of the main policy challenges in the sector. You can find more detailed and comprehensive information about these entities and challenges in other documents, such as entities’ accountability documents, policy documents such as Safer Journeys, and entities’ recent briefings to the incoming Minister of Transport.
1.4
If you would like further information about our work in the transport sector, please contact Gareth Ellis, Assistant Auditor-General Parliamentary Group (Gareth.Ellis@oag.govt.nz).
1.5
We welcome your thoughts on all aspects of our proposed work programme (see Part 4) and areas of potential focus.
About the Auditor-General
1.6
The Controller and Auditor-General – more commonly known as the Auditor- General – is an officer of Parliament who audits all (4000 or so) public entities to check whether public money is being spent as Parliament intended. The role and functions of the Auditor-General are set out in the Public Audit Act 2001.
1.7
The Governor-General appoints the Auditor-General on the recommendation of Parliament for a non-renewable seven-year term.
1.8
The current Auditor-General, Lyn Provost, began her term in October 2009. The Deputy Auditor-General, Phillippa Smith, was re-appointed for a second five-year term in 2010.
1.9
The Auditor-General is accountable to Parliament for how she uses public funds to do her job but her investigations and views about the use of public money are objective and free from political influence.
1.10
Put simply, the Auditor-General helps you to hold public entities to account for their use of public money. The annual audit of public entities’ financial statements forms most of our work by cost. We also:
- carry out performance audits of aspects of public entities’ operations;
- inquire into any matter relating to a public entity’s use of its resources;
- advise Parliament about the performance of public entities;
- audit local authorities’ long-term plans (LTPs);
- provide auditing standards and guidance for our appointed auditors; and
- provide audit/assurance services to public entities, on their request.
1.11
For more information, see the MPs’ guide to the Auditor-General on our website, www.oag.govt.nz.
1.12
The Office of the Auditor-General can help you by:
- briefing you about examinations of Estimates of Appropriations;
- helping you to review public entities’ performance and operations;
- providing briefings on the reports that the Auditor-General presents to Parliament; and
- offering advice.
What to ask transport sector entities
1.13
In our audits of transport sector entities, there is a focus on asset management and performance management information.
Asset management
1.14
Raising the standard of infrastructure and asset management is a key part of the Government’s economic growth agenda.
1.15
When you review transport entities, you may wish to get information on:
- whether the entity is clear about the service that its assets support;
- whether the entity’s asset management approach balances the needs of current and future service users; and
- how the entity knows whether it is managing its assets well.
Performance management information
1.16
Performance reporting is an integral part of parliamentary accountability, allowing Parliament to hold Ministers and central government entities to account. Improving performance information and reporting is crucial in helping to improve effectiveness and efficiency of public sector entities.
1.17
In recent years, we have reported that the quality of performance reporting needs to improve.
1.18
We are phasing in a revised standard for auditing service performance reports. Our revised standard requires our auditors to modify their audit opinion if the performance information in the annual report does not, in their opinion, fairly reflect performance for the year.
1.19
We audited 28 departments and Crown entities under the revised standard for 2010/11. For 2011/12, we will apply the revised standard to another group of entities. We will apply the revised standard to all entities in 2012/13.
1.20
There has been a clear improvement in the quality of performance reports of those entities being audited under the revised standard, although several entities must improve their reporting further.
1.21
You may wish to ask entities whether they are having the effect that they expect. If so, are there opportunities to be more efficient, such as when working with partners to achieve good outcomes? If not, what are they doing to address it and how will they report on future performance?
Other matters for you to consider
1.22
To help your work, you may wish to find out more about:
- local government’s role in the transport sector;
- the New Zealand Productivity Commission’s investigation into the efficiency of the international freight system; and
- how NZTA is working out the value for money of investments in transport.