Here’s what auditors noticed during the 2013 audits

Service performance reporting for the audits of TEIs for the year ended 31 December 2013
(letter sent to the leaders of all tertiary education institutions).

My Office has commented on TEIs’ service reporting for several years now. Last year, we reported to Parliament and sent you a short report summarising what our auditors found in their 2012 audits,

Based on information my TEI auditors submitted centrally, we again assessed the quality of TEIs’ service performance reporting as part of our 2013 audits.

The purpose of this letter is to provide you with the main findings from that assessment. Our previous reports have set out the expected components of high quality reporting in this area.

Given the unique statutory requirements of TEIs, our findings on service performance did not affect our TEI audit reports unless there were material deficiencies against performance as forecast in investment plans – we did not modify any reports in 2013. Where our auditors found that improvements were needed, these were raised in management reports or as part of normal liaison with your TEI.
Main findings:

  • The quality of TEIs’ performance reporting is improving year-by-year and across the board, albeit with some significant variation between individual institutions.
  • The ‘conversation’ has shifted beyond compulsory (largely EPI based) reporting to thinking about, and reporting on, how service performance reporting can represent the comprehensive effects that TEIs aim to have (on their students, in their research, and on wider society). These conversations are sometimes difficult and not all TEIs have yet instituted this breadth of appropriate reporting measures, controls, or systems.
  • Annual reports increasingly contain narrative and explanations about TEIs’ performance. Explanation of variance from targeted performance could form more of this narrative.
  • Some of the ‘basics’ of good performance still need to be bedded in, for example:
    • Measures need to be carefully selected, have adequate controls behind them, and be regularly reported to, and used by, management and governance bodies; and
    • Outputs/services need to be clearly differentiated from each other and from inputs, like staff or buildings, and from impacts, like student achievement, if cost and effect is to be accurately assessed.
  • There is some better alignment between information in investment plans, strategic plans, and annual reports. Investment plans, for the most part, incorporate the latest TEI performance frameworks. Progress can be made in using investment plans as accountability documents forecasting the performance of the TEI across its full range of activities and, thereby, providing a better basis for comprehensive reporting in annual reports.
  • Costs of services needs to form part of good service performance reporting. If attaching costs to classes of outputs does not assist with decision-making, then consideration needs to be given to where cost information can best be reported and used effectively for decision-making.
  • Outcomes supported by meaningful measures/indicators and targets remain crucial to aiding assessment of institutions’ effectiveness. This area requires continued effort.

Improving performance reporting takes resources and expertise, but, done well, it can greatly enhance governance and management practice. My auditors will continue to work to assist you and your staff with improvements where they can.

I have copied this letter, and the information therein, to the Chair of the Finance and Expenditure Committee as part of our regular reporting to Parliament on public service performance. I have also copied other interested parties, i.e. the Ministry of Education, the New Zealand Qualifications Authority and the Tertiary Education Commission.

Yours sincerely

Signature - LP

Lyn Provost
Controller and Auditor-General