Part 2: Our multi-year work programme

Annual plan 2018/19

Our work programme is made up of a diverse range of work, which we group into six categories. Appendix 2 provides a summary of the work we plan to complete in 2018/19 in the context of our multi-year work programme and a more detailed multi-year overview of our work. We describe each category of work below.

1. Theme-based work

Each year, we use our knowledge of the public sector to help determine a theme that we can apply across much of our work. This approach enables us to increase the impact from our work, and more effectively use our unique role to influence improvements in public sector performance and accountability.

In any given year, our theme-based work includes work that we are completing from previous years' themes and work we are starting under a new theme. In 2018/19, we plan to complete a reflections report on our 2016/17 Information theme, complete six reports from our 2017/18 Water management theme, and start work on our Procurement theme. We intend to complete five reports on procurement in 2018/19 and more work on our Procurement theme over the following two years.

In Part 3, we discuss our Procurement theme and the work we plan to carry out. We also discuss what we are considering for our future theme-based work.

The themes we have applied to our work in previous years are:

  • 2017/18 – Water management;
  • 2016/17 – Information;
  • 2015/16 – Investment and asset management;
  • 2014/15 – Governance and accountability;
  • 2013/14 – Service delivery; and
  • 2012/13 – Our future needs – is the public sector ready?

2. Multi-year programmes of work on significant matters

Alongside our theme-based work, we carry out multi-year programmes of work on significant matters that we consider warrant ongoing scrutiny, or where we are required or invited to carry out ongoing work.

The matters that we will continue to scrutinise in 2018/19 and the following two years are:

The Inland Revenue Department's Business Transformation Programme

This programme, expected to cost between $1.50 billion and $1.69 billion and to be completed by 2021, is designed to create a "modern revenue system" that will make it easier for taxpayers to pay their taxes. We have committed to report from time to time on aspects of the programme and have published two reports to date. We expect to carry out further work on this programme in 2020.

Defence capital projects

The Ministry of Defence (the Ministry) has estimated that up to $20 billion will be needed by 2030 to deliver the capability projects outlined in the Defence White Paper 2016 and the Defence Capability Plan – this is more than one-third of total government forecast capital spending over that period. The value of defence capital projects under active management is currently about $2 billion each year and this is expected to rise to $3-5 billion each year by 2030.

The Defence Capability Plan is being reviewed, with a revised version to be approved by Cabinet by November 2018. The revised plan is likely to have an extended time horizon out to 2035.

In recent years, we have provided assurance over the Ministry's annual Major Projects Report along with commentary on the report. In 2018/19, we will continue to focus on the Ministry's annual Major Projects Report. In 2019/20 we intend to start a multi-year programme of work to examine defence capital spending in more depth.

Commentary on the Treasury's 2019 statement on the long-term fiscal position

The Treasury is required to produce a statement on the long-term fiscal position at least once every four years. Financial sustainability is of critical interest to our role in giving an independent view of public sector performance and accountability to Parliament and New Zealanders. We have provided a commentary on each of the last two statements about how the Treasury has considered the long-term outlook and the challenges and opportunities for the Government's finances over the long term.

Our commentaries have also covered how well the Treasury communicated its findings in an understandable, informative, and useful way. The Treasury has been considering how it can better incorporate aspects of well-being in future statements on the long-term fiscal position. In 2019/20, we expect to provide commentary on the 2019 statement.

We are required to carry out multi-year work on:

Auckland Council

Section 104 of the Local Government (Auckland Council) Act 2009 requires the Auditor-General to review the service performance of the Auckland Council and each of its council-controlled organisations from time to time. The work we are required to do on Auckland Council in 2018/19 is already under way. We describe this work more in Part 3.

Alongside the work required by legislation, we have an ongoing interest in examining issues affecting Auckland because of its significance to New Zealand. About 33% of New Zealand's population lives in the Auckland region, and nearly 600,000 more people are expected to be living in the Auckland region within the next 20 years. The Auckland population is one of the most diverse in the world. Over 50% of the country's Gross Domestic Product (GDP) is currently created in the Auckland region. A large proportion of central government capital and social investment is to address transport and housing issues in Auckland.

From time to time, the Auditor-General is asked to consider a request for the Office to carry out a monitoring role over a multi-year time frame. We may be invited to carry out multi-year work on:

Monitoring the response to the Havelock North inquiry recommendations

The Report of the Havelock North Drinking Water Inquiry: Stage 2 was released in December 2017. It focused on improving the safety of drinking water in New Zealand, the lessons from the outbreak of campylobacteriosis in Havelock North in 2016, and the changes that are needed. The Government is considering the report's 51 recommendations, including that:

The Government should invite the Controller and Auditor-General to monitor, for the next five years, the implementation of all the recommendations and initiatives set out in this Stage 2 Report. The Controller and Auditor-General should report to Parliament, as appropriate, on the question of implementation during the five year period.

3. Sharing good practice

Being more active in sharing insights about what "good" looks like is a key aspect of our strategic intentions. By improving the performance of individual public entities, the performance of the entire public sector will be enhanced. To improve, public entities need to understand what is expected of them and what good looks like. As the auditor of every public entity, we are well positioned to guide public entities on what good looks like. We also have an important and influential role as information broker, pointing public entities to other organisations that do similar things better or well.

In 2018/19, we intend to more actively share insights about what good looks like, including updating our existing good practice guides and, where appropriate, developing new guidance. We plan to start with updating our existing guide on severance payments.

We also promote good practice each year by assessing the progress public entities make in implementing the recommendations from some of our previous performance audits, and checking how effective their actions have been in achieving improvements.

4. Sector-based reporting

Each year, we publish sector reports on the results of our annual audits within different sectors. Using information from our audits, including our understanding of the entities and their management controls and systems, our sector reports discuss key issues and trends, systemic problems, and opportunities for improvement within sectors.

We prepare reports on some sectors every year, for example the results of local government audits, and our central government report that sets out the results of our audit of the Financial Statements of the Government and the Controller function. Reports on other sectors are prepared periodically. We decide which other sectors to report on based on matters arising in particular sectors or the theme we have chosen to focus on.

Every three years, we also prepare reports on key issues and trends arising from our audits of the consultation documents and Long-term Plans in local government. The Auditor-General has a statutory duty to issue audit reports on local authorities' Long-term Plans, which are prepared every three years. Our auditors provide an audit opinion on both the consultation document, which local authorities prepare to consult with their communities about the significant issues facing the local authority, and the final long-term plan. We use the information from our audits to prepare these reports.

5. Thought leadership

Influencing improvements in the public sector accountability system is a key aspect of our strategic intentions. How effective the public sector accountability system is in providing assurance that public entities are meeting their required responsibilities and standards is critical to New Zealanders' trust and confidence in government.

Our ongoing programme of thought leadership work will examine whether our public sector accountability system is keeping pace with changes in the public sector environment. We intend to encourage discussion and debate about key aspects of the public sector accountability system, including performance reporting, with a view to influencing improvements.

6. Stand-alone work on significant matters

During our work programme planning, we scan for significant matters across central and local government, and consider where we can add value through providing assurance and influencing improvements. Where we identify important matters that do not fall within our theme-based work or warrant ongoing scrutiny through a multi-year programme of work, we include these in our work programme as stand-alone pieces of work.

Currently, we have no stand-alone pieces of work planned for 2018/19 to 2020/21. This may change if significant issues arise that the Auditor-General considers warrant inclusion in our work programme.

How we manage risks to achieving our work programme

We have a challenging work programme. We recognise there are risks to achieving our work, including:

  • that we do not have sufficient capacity or capability to do the work;
  • that we do not manage the quality, timeliness and cost of our work well; and
  • that we do not achieve the impact we are aiming for.

Our robust planning helps to mitigate these risks. Our business plans are well aligned with the priorities described in The Auditor-General's Strategy 2018 to 2021. Furthermore, they are supported by the actions identified in The Auditor-General's Organisation Development Plan 2018-21 which are designed to ensure that we are in the best possible position to complete our work.

Also, there is flexibility in our work programme to respond to changes. Our work is planned to be achieved based on what we know at present. If new information or risks come to light, the Auditor-General may decide to change some of our planned work, particularly the work in future years beyond 2018/19.