Part 1: Introduction

Detailed assessment of the New Zealand Office of the Auditor-General against International Standards.

The Performance Measurement Framework (PMF) provides Supreme Audit Institutions (SAIs) with a way to assess their performance against established international good practice for external public auditing. It was created by the INTOSAI Working Group on the Value and Benefits of SAIs.

Our goals in carrying out the assessment are to:

  • provide good quality management information to enable the measurement of  the New Zealand Office of the Auditor-General(the Office) performance against internationally recognised standards and expectations;
  • provide a means of reporting publicly about the Office’s performance;
  • participate in the assessment to the same time frame as neighbouring SAIs in the South Pacific, demonstrating the Office’s commitment to the Pacific Association of Supreme Audit Institutions’ (PASAI) strategic plan, and supporting the development work of the Office’s regional neighbouring SAIs; and
  • provide an objective and comprehensive overview of the Office’s performance for the benefit of the incoming Auditor-General.

The Auditor-General made a request for the SAI PMF assessment to be conducted and the Combined Leadership Team, at a meeting in February 2016, made the decision to carry it out. This assessment uses version 3.2 of the SAI PMF.

A core team of senior staff, with operational audit experience and trained to use the PMF, carried out the assessment. Staff in both the Office of the Auditor General (OAG) and Audit New Zealand gathered evidence to support the assessment.

The assessment team made all the scoring decisions. They are also the authors of this report. The Auditor-General and the Combined Leadership Team were provided with preliminary findings on completion of the fieldwork and a draft of this report. The assessment team considered comments from the Auditor-General and Combined Leadership Team and actioned them where appropriate.

The assessment was conducted alongside neighbouring SAIs in the South Pacific region, who were participating in a SAI PMF ‘Lite’ project sponsored by the INTOSAI Development Initiative (IDI) and the Australian Department for Foreign Affairs and Trade (DFAT). The Office was not part of the SAI PMF ‘Lite’ project, but  it did participate in a regional planning workshop in February 2016. In that workshop, the Office provided input into neighbouring SAIs’ initial planning and development, and gained feedback on its own SAI PMF project planning.

The assessment covers the whole mandate of the Auditor-General, including financial, performance, and compliance audits. However, it does not include non-audit work, such as research and development projects, controller function, inquiries, and international work.1 The assessment includes audit work done by both the Auditor-General’s in-house provider, Audit New Zealand, and private sector firms contracted to do audits on the Auditor-General’s behalf. However, only Audit New Zealand’s processes were assessed.

About 87% of the Office’s audit effort is devoted to the annual audits of public entities. About half of the financial audit work is outsourced. These are audits that are primarily financial audits, but also include aspects of performance and compliance audits. The Office has a sizeable performance audit function that results in about 12 performance audit reports each year. A small amount of compliance audit work is carried out, some as part of the annual audit and some as stand-alone engagements.

1: These other activities are outside the scope of the International Standards of Supreme Audit Institutions (ISSAIs), which the SAI PMF is based. The Controller function and the Office’s inquiries work are described in more detail in Part 3.