Part 1: Introduction
1.1
In this Part, we discuss:
- why we did our audit;
- the purpose and scope of our audit;
- what we did not cover;
- how we carried out our audit; and
- the structure of this report.
Why we did our audit
1.2
During consultation on our draft 2013/14 work programme, the Primary Production Committee asked us to consider looking at the Primary Growth Partnership (PGP). In particular, the Committee was concerned about the transparency of PGP, including how well it was being managed and was achieving its objectives.
1.3
The Auditor-General decided to do a performance audit because of the:
- potential significance of PGP to New Zealand's economic growth;
- emphasis on the Government working in partnership with industry;
- risk and opportunity inherent in innovation; and
- large amount of public and private money involved.
The purpose and scope of our audit
1.4
We set out to assess how effectively the Ministry for Primary Industries (the Ministry) introduced and has managed PGP to achieve its intended outcomes, and we focused on how the Ministry measures and reports progress towards the outcomes.
1.5
Specifically, our audit reviewed how well the Ministry:
- supports the assessment of proposals for PGP funding and business cases to enable sound decision-making;
- builds and maintains partnerships with industry partners;
- measures progress towards PGP's objectives; and
- shares the results of the programmes with the public.
What we did not cover
1.6
We did not audit the industry partners involved in the PGP programmes that we reviewed because, with one exception, they are not public entities and so are not audited by the Auditor-General. We also did not audit the quality of investment decisions.
1.7
We did not include PGP funding allocated to the Centre for Agricultural Greenhouse Gas Research in our audit. A separate group in the Ministry manages the Centre for Agricultural Greenhouse Gas Research, which is distinct from PGP and has different funding arrangements and a separate governance structure.
How we carried out our audit
1.8
We reviewed six PGP programmes. We selected programmes that were approved in different funding rounds, were in different industries, and had significant Crown funding committed to them. Figure 1 sets out the programmes we selected, including the programme's goals and industry partners. The six programmes were funded for periods of five to seven years.
Figure 1
The Primary Growth Partnership programmes that we selected for our audit
| Programmes | Programme goals | Industry partners | Funding duration | |
|---|---|---|---|---|
| FarmIQ – Demand-driven value chain for red meat | To tailor farming systems and supply products that meet customer preferences; the implementation of electronic identification and traceability systems to enable the performance of individual animals to be measured from on the farm through to meat quality at the point of processing. | FarmIQ Systems Limited | 7 years 2010-2017 |
|
| The New Zealand Sheep Industry Transformation Project (NZSTX) | To increase production of market-driven sheep, change the balance between New Zealand strong and fine wool production, and generate better grower returns for fibre, meat, and other products such as leather. | The New Zealand Merino Company Limited | 5 years 2010-2015 |
|
| Transforming the Dairy Value Chain (Dairy Value Chain) | To create new dairy products, increase on-farm productivity, reduce environmental impacts, and build the capability and capacity to meet the future needs of New Zealand's dairy industry. | DairyNZ Incorporated and Fonterra Co-operative Group Limited | 7 years 2011-2018 |
|
| Precision Seafood Harvesting (PSH) | To create a new wild-fish harvesting technology that will result in more precise catches, allowing fish to be landed fresher, in better condition, and of higher value. | Precision Seafood Harvesting General Partner Limited | 6 years 2012-2018 |
|
| FoodPlus – Generating more value from the red meat carcase (FoodPlus) | To identify opportunities to create new higher-value products from red meat, with a focus on new food, ingredients, and healthcare products. | ANZCO Foods Limited | 7 years 2012-2019 |
|
| Seed and Nutritional Technology Development (Seeds) | To develop technologies to improve pasture establishment, reduce the impact of pests and diseases, overcome animal health disorders, and reduce greenhouse gas emissions and losses from drought stress. | PGG Wrightson Seeds Limited and Grasslanz Technology Limited | 6 years 2013-2019 |
|
1.9
For each programme, we reviewed:
- a range of documents, from the initial proposal to the ongoing monitoring and managing of the programme;
- documents that showed how the programme would work and the results it would achieve; and
- meeting minutes of the Investment Advisory Panel and Programme Steering Groups.
1.10
We reviewed corporate policies and accountability documents. We also reviewed internal review and external evaluation documents.
1.11
We interviewed current and former staff from the Ministry's head office involved in the PGP process, representatives from Programme Steering Groups and the Investment Advisory Panel, and staff from the Ministry of Business, Innovation and Employment and the Treasury. We also spoke with representatives from some of the industry partners.
Structure of this report
1.12
In Part 2, we discuss the purpose of and background to PGP, how PGP was intended to operate, and the conditions and criteria for assessing programmes. We summarise funding commitments made to industries and to the programmes we looked at and the early results of those programmes.
1.13
In Part 3, we discuss how the Ministry set up PGP and supported the assessment of proposals and business cases. We also discuss what the Ministry has done to improve its management of PGP and how the Ministry managed conflicts of interests.
1.14
In Part 4, we discuss partnerships between the Ministry and its industry partners, including the Ministry's flexible approach to forming partnerships, how some of the Ministry's management practices reflected its partnership with industry, and the Ministry's emphasis on collaborating with industry and other government entities.
1.15
In Part 5, we discuss the intended long-term benefits and results of the six programmes we reviewed, how the Ministry uses information about the progress of programmes to support the governance of programmes, and how the Ministry intends to measure what PGP as a whole has achieved.