Part 1: Our role and outcomes
Everything we do is about improving the performance of, and the public’s trust in, the public sector.
Our role
The Auditor-General is an Officer of Parliament who is independent of executive government and Parliament. Parliament funds the Auditor-General’s work and holds the Auditor-General to account for the use of those funds. By law, the Auditor-General audits all public entities in New Zealand that are required to prepare general purpose financial reports – about 3700 public entities, such as government departments, Crown entities, schools, and State-owned enterprises. The role includes auditing local authorities, which are accountable to the public for the activities that they fund with rates and other revenue.
The Auditor-General’s role is to help Parliament to ensure that public entities are effective, efficient, and accountable. To be effective in this role, the Auditor-General must be independent of the Government. The Auditor-General’s audits give independent assurance to Parliament and the public about how public entities are performing. Auditing and reporting on the results of those audits is an important way of holding public entities to account for their use of public resources and powers.
Our organisation
Our work is carried out by about 367 full-time equivalent staff in two business units – the Office of the Auditor-General (OAG) and Audit New Zealand – supported by a shared team of corporate services staff. We call this whole organisation “the Office”. We also contract auditors from about 50 private sector accounting firms to carry out some annual audits on the Auditor-General’s behalf.
The OAG sets strategy, policy, and standards; appoints and oversees auditors; carries out performance audits; provides reports and advice to Parliament; and carries out inquiries and other research.
Audit New Zealand, the larger of the two business units, has offices in seven cities and carries out annual audits of public entities that the Auditor-General allocates to it. Audit New Zealand provides other assurance services to public entities within the Auditor-General’s mandate, consistent with the Auditor-General’s auditing standard on the independence of auditors.
How we are funded
The Office is funded through Vote Audit, which has five appropriations1 that fund our work and are described in Part 4. Two appropriations provide funding for most of our work – Audit and Assurance Services RDA (revenue dependent appropriation) and the multi-category appropriation Statutory Auditor Function.
The Audit and Assurance Services RDA covers the carrying out of audits and related assurance services as authorised by statute. This appropriation is largely funded by audit fees collected directly from public entities. We have established a memorandum account for the Audit and Assurance Services RDA to manage fluctuating revenue flows and help keep audit fees at reasonable levels over time.
The Statutory Auditor Function appropriation is largely Crown-funded and includes two outputs:
- Performance Audits and Inquiries: and
- Supporting Accountability to Parliament.
How we make a difference
In carrying out our statutory role, we play an important part in influencing and promoting improvements in the public sector’s performance and in building trust in the public sector.
Our vision is that our work improves the performance of, and the public’s trust in, the public sector. The outcomes we aim for are that New Zealand has a public sector that is trusted, demonstrates responsible behaviour, and performs well. To achieve our outcomes, we aim to have impact in two areas:
- Public entities respond to our recommendations; and
- Parliament and public entities are supported and get value from our advice.
This report outlines how effectively we worked towards our outcomes in 2015/16.
Figure 1 summarises the outcomes we aim for, the effects we aim to have, and the services that we provide.
Figure 1
Our outcomes framework
Our strategic intentions
The Auditor-General's strategic intentions 2014/15 to 2017/182 sets out the outcomes we seek and the four strategic objectives we established to focus our work from 2014/15 to 2017/18. The strategic objectives are not mutually exclusive, and they are designed to be ambitious. They reflect the outcomes we seek and are intended to strengthen our contribution to improving public sector performance.
Our strategic objectives are:
- contribute to a stronger public sector;
- lead by example as a model organisation;
- demonstrate our relevance to citizens as stakeholders; and
- position our Office for the future.
We provide an assessment of our progress against our strategic intentions in Part 3.
1: An appropriation is a Parliamentary authorisation to incur expenses or capital expenditure. A multi-category output expense appropriation allows expenses to be transferred between the output classes concerned, without the need for separate Parliamentary authority.
2: Available on our website at www.oag.govt.nz/2014/strategic-intentions.