Auditor-General's overview

National security arrangements are probably not matters that most New Zealanders would think about often, but they are important to all of our lives. Although a level of secrecy is needed, the National Security System needs to strike the right balance between secrecy and transparency if we are to trust it.

My Office carried out a performance audit to provide assurance to Parliament and the public about the effectiveness of governance arrangements for the National Security System.

We looked at the governance arrangements for responding to national security events, identifying and managing risks, and building national resilience. We used the eight elements of good governance published in our recent report, Reflections from our audits: Governance and accountability, to assess governance.

As part of our audit, we examined two examples of how the National Security System responded to recent threats. These were the threat to contaminate infant milk formula with 1080 poison (Operation Concord) and the response to terrorist attacks in Paris in November 2015. We also observed the first day of an exercise (Exercise Tangaroa) simulating a national response to a tsunami.

In my view, the governance arrangements for responding to national security events and emergencies are well established, fundamentally sound, and fit for purpose. The response to Operation Concord was an example of the National Security System working well.

The "response" side of the National Security System

The right people come together and there are strong, trusting, and respectful relationships between them. This provides a solid platform for effective governance and enables the National Security System to respond well. The National Security Systems Directorate¹ generally supports the response side of the system well and is providing better support over time.

There is a National Exercise Programme, which allows the main parties to practise responding and learn lessons. This contributes to ensuring that all-of-government responses to national security events and emergencies are governed effectively.

The "governance" side of the National Security System

New governance arrangements were introduced in 2014. Since then, the governance of how national security risks are managed and how our national resilience is strengthened has started to improve. The right people are on the various boards that make up the "governance" side of the National Security System and their strong, trusting, and respectful relationships are enabling the new governance arrangements to mature quickly. The National Security Systems Directorate is providing more strategic support for governance.

Getting to a world-class national security system

The Department of the Prime Minister and Cabinet (DPMC) aspires to have a world-class national security system. New Zealand's security system has some of the characteristics of a world-class system. For example, the system can quickly mobilise a network of people and there are clear frameworks for managing the response to national security events and emergencies.

DPMC is making further improvements as it works towards a world-class national security system. In our view, those further improvements are needed. The work under way to define national security risks is particularly important, and clearer and stronger accountabilities for risk management and reporting are needed.

Information flows, particularly for classified information, need to improve throughout the National Security System. For the System to be more resilient and operate in a sustained and seamless way, it also needs to be supported by processes that better identify, record, and transfer institutional knowledge. Lessons identified from activating the National Security System and exercises need to be recorded and applied more consistently. People coming into the National Security System also need to be inducted deliberately and methodically.

DPMC has responded positively to our recommendations and has already talked to us about its plans to address them.

I thank the staff of DPMC and the other agencies, including the many chief executives we interviewed, for their time and co-operation with our audit. It is reassuring to know that New Zealand can call on an experienced, dedicated, and resolute network of people to come together constructively and quickly when needed, to help ensure our national security.

Lyn Provost
Controller and Auditor-General

24 November 2016

1: The National Security Systems Directorate is a business unit in the Department of the Prime Minister and Cabinet, which serves as the secretariat for the National Security System.