Part 6: Our recent, ongoing, and future work

Public entities in the social sector: Our audit work.

In this Part, we describe our ongoing and future work in the social sector. In particular, we describe the performance audit work relevant to the social sector that is currently under way or under consideration for 2014.

The role of our annual audits

As outlined in Part 5, our annual audits assess entities' financial and management controls, and service performance information and associated systems and controls. Our audits assess whether entities' reporting fairly reflects their activities, look at policies and controls, verify samples of transactions and account balances, and review significant estimates and judgments made by entity's senior management. Our audits also cover selected elements of entities' procurement, contract management, asset management, project management, and risk management systems if the auditor considers that these are integral to the entity's' risk profile.

When deciding on areas of focus for the audit, auditors take into account key business drivers and areas of risk. For example, areas of focus that guided our assessment of MSD's management and control environment in the 2013 annual audit included welfare reform, the Children's Action Plan, ISO, and procurement. We expect that our 2013/14 audit of MSD will continue to look at these risk areas in the light of the significant changes under way.

Performance audits and other work

As well as the annual audit's focus on policies, controls, and sample transactions, the Auditor-General's annual programme of performance audits assesses entities' performance.

The Auditor-General's report, Using the United Nations' Madrid indicators to better understand our ageing population (2013), discussed whether public entities were collecting data on a set of international indicators to assess older people's circumstances and changes in our population structure, which is ageing. Findings reports for the 50 Madrid indicators are online at

One way or another, many public resources will be committed to responding to our ageing population. There are many uncertainties about the effects of a changing population structure on individuals and on society as a whole. Having the right kind of data available is one component in being prepared for the future. Accurate, relevant data can be used to identify improvements or adverse consequences as the result of changes in society and in government policy and help support accountable and transparent decision-making.

Although we found that public entities have, at least, a minimum set of demographic data and data about older people that they can use, they need to:

  • use Statistics New Zealand's standard for reporting by age group;
  • give reasons for when data is updated; and
  • consider how they might measure whether older people living in rural areas are disadvantaged in accessing public services.

We also found that women, Pākehā, and people on higher incomes often (but not always) benefited more than men, non-Pākehā, and people on lower incomes from improvements to date in older people's circumstances.

Future work and ongoing areas of interest

In 2013/14, our work programme is focused on the theme of service delivery. We are carrying out performance audits on, amongst others, complaints processes and case management within the Accident Compensation Corporation and MSD. Our work on case management is focused on determining whether case management is used effectively and efficiently. We are also planning to carry out a performance audit on whānau ora, reflecting our interest in examining service delivery through third parties.

In 2014/15, we are proposing a focus on governance and accountability in the public sector. We are also giving thought to investment and asset management and information assets as possible future themes.

We have yet to decide the work programme for the governance and accountability theme, and which entities and sectors we will focus on. Among our objectives will be understanding the effectiveness of new governance models and the implications of reforms to the Public Finance Act 1989, State Sector Act 1988, and Crown Entities Act 2004. The arrangements put in place for the work on vulnerable children, and the implementation of the Children's Action Plan, will be of interest – because they represent a new way of working between agencies and Votes – as we consider our approach to examining childhood support as part of our future work programme.

Examining the implementation of welfare reform will be part of our long-term work programme. The reforms represent a significant change programme for MSD, affecting a large number of New Zealanders. We have a strong interest in observing whether MSD has maintained an effective control environment. Longer term, we will also want to see whether the new policy settings have been implemented in an effective and efficient way, achieving the outcomes intended.

The other areas of significant change mentioned in Part 4 of this report will also remain of interest to this Office. Given the significance of Housing New Zealand's housing stock, we have an interest in how the entity manages this asset for the benefit of New Zealanders and how effectively and efficiently social housing services are provided. We will consider the Tāmaki housing project as part of our work programme for 2014/15.

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