Part 1: About us

Annual plan 2018/19.

Why is there an Auditor-General?

Parliament authorises all government spending and gives statutory powers to public entities. Public entities are accountable to Parliament (and their communities in the case of local government) for how they use the resources and powers that Parliament gives them. Parliament seeks independent assurance from the Controller and Auditor-General (the Auditor-General) that public entities are using these resources and powers, and are accounting for their performance, in the way that Parliament intended.

The Auditor-General's role is to help Parliament in its scrutiny of executive government, to ensure that public entities are effective, efficient, and accountable. To be effective and credible in this role, the Auditor-General must be independent of the Government and operate in an apolitical manner. The Auditor-General is an Officer of Parliament and does not comment on the policies of the Government or local authorities.

Consulting with members of Parliament on our proposed work programme is one way in which the Auditor-General supports Parliament's scrutiny of executive government. To preserve independence, however, the Auditor-General makes the final decisions about the work programme.

Annual audits

The Auditor-General is responsible for auditing every public entity in New Zealand that is required to publicly report (about 3600), many of which are funded by rates or taxes. They include, for example, government departments, district health boards, schools, licensing and community trusts, universities and polytechnics, local authorities and State-owned enterprises.

Each year, we also expect to carry out audits of:

  • the financial statements of the Government;
  • the Government of Niue, its subsidiaries, and other associated entities;
  • the Government of Tokelau; and
  • entities the Auditor-General has agreed to audit under section 19 of the Public Audit Act 2001.

Our annual audits make up nearly 90% of our work. Appendix 1 provides a summary of the number and type of public entities in our audit portfolio at June 2018. The number of public entities that we audit has declined by about 250 during the past three years. This is mainly because of the removal of legislative requirements for many subsidiaries of public entities to report separately.

Our public accountability system places responsibility on public entities to account annually for their performance. Public entities do this mainly through publishing their annual reports, which include financial information and, where relevant, performance information. The Auditor-General's work gives assurance to Parliament, public entities, and the public that public entities' financial statements and performance information fairly reflect the results of their activities.

The Auditor-General can also audit whether public entities carry out their work effectively and efficiently, and whether they act with due probity, comply with legislation, and are financially prudent.

Our annual audits of public entities give us direct interaction with, and insight into, how the public sector is operating. The information we gather from our annual audits gives us a unique view of the challenges, emerging issues, and trends across the public sector. We use this information to advise select committees in their work in holding public entities to account as part of Parliament's scrutiny of executive government. We also use this information to help us plan our work programme. It assists us in our understanding of the environmental context for planning our work, and in determining where we can best focus our efforts in improving public sector performance.

Each year, we collate the results of our annual audits in central and local government and other sectors and publish the key findings in our sector reports. The sector reports we plan to complete in 2018/19 are described in Part 3.

Performance audits, inquiries, and other work

As well as annual audits, the Public Audit Act 2001 empowers the Auditor-General to carry out performance audits, inquire into how a public entity uses its resources, and study other matters affecting the public sector.

Performance audits are a key part of our work programme and enable us to delve more deeply in particular areas than we are able to in our annual audits. We also monitor public entities' progress in implementing the recommendations from our previous performance audits and include this work in our work programme.

Inquiries are not included in our work programme because, in contrast to our planned work, our inquiries work reacts to matters of current public concern and is therefore unpredictable. We make decisions about whether issues warrant investigation as matters of public concern arise. In 2018/19, we expect to complete work on inquiries related to procurement matters at the Waikato District Health Board and Westland District Council. These inquiries are currently in progress.

Reporting to Parliament

Each year, we publish reports on the results of our annual audits, performance audits, major inquiries, and other work. Through this reporting to Parliament and other stakeholders, we are able to draw together common themes and trends, and highlight ways that public entities can perform better.

We also:

  • advise Parliament and select committees to support annual reviews and Estimates examinations;
  • carry out and report on our responsibility under the Local Government (Auckland Council) Act 2009 to review the service performance of Auckland Council; and
  • consider enquiries from ratepayers, taxpayers, and members of Parliament.

Our international work

We continue to make a significant contribution to the international auditing community. We aim to strengthen public sector accountability and promote good governance by sharing our knowledge, skills, and expertise with other audit bodies throughout the world, particularly in the Pacific region. We take part in international organisations, forums, and working groups that develop accounting and auditing guidance and standards. These groups include the Global Audit Leadership Forum and the International Organisation of Supreme Audit Institutions (INTOSAI) and its various committees and working groups.

Our work to improve public sector auditing in the Pacific is part of our commitment to the Pacific Association of Supreme Audit Institutions (PASAI). PASAI is the official association of supreme audit institutions in the Pacific, and is one of the regional working groups within INTOSAI. The Auditor-General of New Zealand is the Secretary-General of PASAI.