Part 2: Our multi-year work programme

Annual plan 2019/20.

What we aim for through our work

The ultimate outcome that we seek from our work is that Parliament and New Zealanders can have trust and confidence in the public sector. To contribute to that outcome, we aim to achieve the following impacts:

Parliament provides effective scrutiny of the public sector;
New Zealanders are better informed about the performance and accountability of the public sector; and
the public sector improves its performance and accountability.

How we plan our work

The processes we use to plan our work programme enable us to identify and prioritise work that we consider will best contribute to achieving our impacts, and to our ultimate outcome. We have very limited resources and so we must ensure that we target our work for maximum effect, in terms of both what we do and when we do it.

We draw on information from a range of sources to help inform our work. We use the information our auditors collect about the challenges, emerging issues, and trends across the public sector, alongside our ongoing monitoring of risks and our independent analysis of public sector performance and issues. Also, our central and local government advisory groups help us to better understand the common themes and issues across the central and local government sectors. In addition, we draw on our previous work and knowledge – for example, our reflections reports, themes from our inquiry reports, performance audit reports, and follow-up reports on progress in implementing the Auditor-General's recommendations.

How we manage risks to achieving our work programme

We recognise that there are risks to achieving our work programme, including:

that we do not have sufficient capacity or capability to do the work;
that we do not achieve the right balance in quality, timeliness, and cost of our work; and
that we do not achieve the impacts we are aiming for.

Our planning helps to mitigate these risks. Additional funding has also been provided as part of Budget 2019 to increase our resources in key delivery areas. Our business plans are well aligned with our strategic priorities and are supported by our Organisation Development Plan. The focus we have placed on building our capability and increasing our resources helps 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.

Outcomes for Māori

The public sector has a key role to play in ensuring a successful and effective relationship between the Crown and Māori. Being effective for Māori is an important aspect of public sector performance that we consider when planning our work.

The effectiveness of the public sector in improving outcomes for Māori is included in many aspects of our work programme. For example, our work on the public sector accountability system will consider Māori approaches to accountability and what learnings there are to help achieve a more relevant public sector accountability system for New Zealand. We are interested in how public sector reforms will strengthen accountability for the Treaty partnership between Māori and the Crown.

Improving outcomes for Māori is a significant component of our work under the theme, Improving the lives of New Zealanders. For example, Māori are more likely to be the victims of many crimes, including family violence. In 2019/20 we plan to start examining performance in achieving reductions in family violence. This work will assess how effectively agencies are consulting and involving Māori in different initiatives and programmes. In addition, our work in 2020/21 on the effectiveness of Whānau Ora will look at how well programmes and initiatives are delivering better outcomes for whānau. As we further identify and scope topics under this theme, a fundamental consideration will be outcomes for Māori.

The content of our work programme

Appendix 2 provides a summary of the work we plan to complete in 2019/20 in the context of a multi-year overview of our work. In that Appendix, the work is grouped in categories, which we describe below.

1. Theme-based work

Applying a theme across aspects of our work enables us to increase the impact of our work, and to more effectively use our unique role to influence improvements in public sector performance and accountability.

In any given year, our theme-based work includes both work that we are completing from previous years' themes and work that we are starting under a new theme. In 2019/20, we plan to:

complete several reports about our Water management theme;
complete work from the first year of our three-year Procurement work programme;
start the second year of work on our three-year Procurement work programme; and
start work on our Improving the lives of New Zealanders theme.

In Part 3, we explain more about our Procurement theme. We also outline our Improving the lives of New Zealanders theme and the work we plan to carry out. We are still exploring and scoping work under this latter theme. We expect that future themes will emerge from our work during 2019/20.

2. Issues of ongoing interest

Alongside our theme-based work, we carry out work on issues that we consider warrant scrutiny, or where we are required to carry out ongoing work. In 2019/20, we intend to carry out work on:

Ethics and integrity

Through our work, we have observed examples where public entities have not had the right culture, leadership, or systems in place to ensure the high levels of integrity and ethical behaviour that Parliament and the public expect. There have also been a number of high-profile instances of fraud in the public sector. Unethical behaviour, dishonesty, and corruption erode New Zealanders' trust and confidence in our public sector, and can affect New Zealand's international reputation. We therefore consider that public sector ethics and integrity is a critical issue for us to focus on now and in future years.

We plan to carry out work to better understand and describe the public sector ethics and integrity landscape, examining what expectations, advice, and support are available to public entities to ensure that they put in place an appropriate ethical culture, and controls for preventing and detecting wrongdoing.

We anticipate that our work will involve greater collaboration with other integrity agencies where appropriate – for example, the Serious Fraud Office and the State Services Commission.

Review of service performance – 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. In 2019/20, we intend to examine how effectively and efficiently Auckland Council is building its resilience and preparedness to respond to disasters, working in partnership with other agencies, local iwi, and communities to reduce disaster risks and prepare for disaster response.

Our ongoing focus on Auckland matters
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. A large proportion of central government capital and social investment is in Auckland to address transport and housing issues. We intend to carry out work on the Auckland City Rail Link in 2019/20 and the Tāmaki regeneration programme in 2020/21 as part of our Procurement themed work. We are also considering an examination of public housing provision in Auckland.

Risk management in local government

Historically, reviews have found that some councils have weak practices for risk management. Through our audit work, we have also identified that there is room for councils to improve their management of risk.

Starting in 2019/20, we intend to further examine how councils approach risk management. We will examine information about councils' understanding of risk, the approaches they use to manage risk, including the role of councils' audit and risk committees, and how councils communicate risk to their communities.

Our stocktake will inform potential future areas of work. We want to identify where we can best add value, given the work of others (for example, Local Government New Zealand and the New Zealand Society of Local Government Managers) in supporting councils to improve their management of risk.

Inland Revenue Department's Business Transformation programme

Building on our previous work in 2015/16 and 2017/18, we are interested in knowing whether the public spending on Inland Revenue's Business Transformation programme is delivering the intended benefits. The Business Transformation programme is significant because of the large amount of public funds being spent (which is estimated to be in excess of $1.3 billion), the critical role that Inland Revenue carries out in collecting Crown revenue, and the effect that the tax system has on New Zealanders and businesses. We had planned to carry out this work in 2020/21. We now plan to carry it out in 2019/20 so that we can provide more timely assurance and relevant advice to Parliament and Inland Revenue.

The Treasury's 2020 Statement on New Zealand's Long-term Fiscal Position

The long-term financial sustainability of government is critical for New Zealanders' inter-generational well-being. The choices that governments make about public spending, tax, and borrowing, and the balance between them, affect New Zealand's economic, social, and environmental outcomes and the Government's long-term resilience.

At least every four years, the Treasury is required to prepare a statement on the Government's long-term fiscal position. It is an important part of the good financial management of government. We intend to review the Treasury's next long-term fiscal statement. We are interested in understanding and commenting on:

the approach that the Treasury takes;
the Treasury's long-term fiscal model and how it is used; and
the links between the long-term fiscal model and the information presented in the Statement on New Zealand's Long-term Fiscal Position.

Controller function

Our Controller function is a core part of the Controller and Auditor-General's role as "public watchdog" and provides assurance to Parliament and New Zealanders that the Government has spent public money in line with Parliament's authority. We will continue to publish six-monthly updates about our Controller work.

We provide more detail about our planned work on these issues in Part 3.

3. Regular reports

Each year, we publish a suite of reports on the results of our work across different sectors. Using information from our audits, including our understanding of the entities and their control systems, our sector reports discuss key issues and trends, systemic issues, and opportunities for improvement within sectors.

We prepare reports on some sectors every year – for example, we report on the results of the local government and central government audits. We also report on the results of our annual audit of the Financial Statements of the Government and on 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.

4. Sharing good practice

To improve their performance, public entities need to understand what is expected of them and have access to good practice guidance that is relevant to the New Zealand context. Public entities tell us that they would welcome more good practice guidance. As the auditor of every public entity, we are well positioned to guide public entities on what "good" looks like. Improving the performance of individual public entities will help contribute to improvement in the performance of the entire public sector.

In 2019/20, we intend to be more active in sharing good practice with public entities. We will update our good practice guidance material, and implement a range of approaches to share good practice more. We will regularly host meetings and other events to share our good practice guidance and examples of activities being done well or that others can learn from. We will also point entities to other organisations that do similar activities "better" or "well". We plan to work more with other agencies who prepare good practice on similar topics to ensure that we maximise our influence and help public entities improve.

5. Influencing improved performance and accountability

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 increased focus on influencing improvements in the public sector accountability system will continue in 2019/20 and beyond. Following publication of our Annual plan 2018/19, reforms to different aspects of New Zealand's performance and accountability systems were proposed by the central agencies. In response, we reassessed the work we had planned to carry out and undertook other work to influence positive change in the future public management system. Appendix 2 describes the work we completed in 2018/19 and the work we intend to complete in 2019/20.

In 2019/20, building on our previous work, we intend to examine the state of the public sector accountability system. We want to influence and support future public sector management reforms to strengthen the accountability system.

Our work will also include an assessment of the state of public sector performance reporting. We want to assist public entities to improve their performance frameworks and reporting practices. We will consider this in the context of the increasing focus on outcomes.