Part 4: Developing our organisational capability

Annual report 2019/20.

There are six key areas that we must manage well to improve our organisation and support the delivery of The Auditor-General's strategic intentions to 2025.

Six key areas that we must manage well to improve our organisation.

By improving the way we manage these resources, we ensure that we are in the best possible position to carry out our core functions to the standard that Parliament and the public expects.

We provide more detail below about each of the six key areas we are focused on, why they are important, and what we have achieved in 2019/20.

Image of a check markOur independence and reputation

Our independence and strong mandate that underpin all our work and activities.

Maintaining our independence is critical. The credibility of our work relies on being free of influence (real or perceived) so that we can carry out our work and report without constraint. We have high standards of independence, which we have further enhanced during the year, and we closely monitor compliance with those standards.

Our independence and reputation are also critical to maintaining Parliament's and the public's trust and confidence in our work, and enable us to maintain our position as one of the strongest "pillars" in New Zealand's national integrity system.1

During 2019/20, to protect the quality and independence of our audit work, we:

  • continued to actively monitor and manage potential conflicts of interest for our staff and
  • the audit service providers appointed to carry out audits on behalf of the Auditor-General;
  • implemented stronger auditor independence standards, limiting the consultancy work of audit service providers to only work of an assurance nature for the public organisations they audit; and
  • maintained a focus on risks to our independence and reputation in our strategic risk register.

Image of our peopleOur people

Our culture and engagement, skills, and capability that enable us to deliver high-quality professional work.

A positive culture and strong engagement will help our people to perform at their best. The reputation of our Office relies on our ability to attract and retain capable and highly skilled staff.


  • reviewed our organisational structure to ensure that it is fit for purpose and implemented new ways of working;
  • prepared a people strategy, and started work on a Te Ao Māori strategy;
  • established a forum for OAG and Corporate Services Team people leaders (those who manage staff);
  • continued the training and development of our audit staff, including supporting their qualifying as chartered accountants and holding training events to further develop their capability;
  • invested in our capability and competence in engaging with Māori by encouraging and enabling all staff to have a basic knowledge of te reo Māori, with specific training made available for staff working with public organisations where tikanga Māori is fundamental to how they operate;
  • improved our flexible working arrangements to help attract and retain great staff;
  • reviewed the remuneration and reward system for staff in the OAG and the Corporate Services Team;
  • analysed our gender pay gap and, while like-for-like roles do not show a gender bias in pay, we know that there is work still to do to bring more women into management roles;
  • completed a learning and development plan that supports the technical, leadership, and professional needs of staff in the OAG and the Corporate Services Team; and
  • provided a range of support to our staff to ensure that their well-being and welfare was prioritised and managed well during the Covid-19 lockdown and beyond.

Equal employment opportunities

Under the Public Audit Act 2001, the Auditor-General must develop and publish an equal employment opportunities (EEO) programme, ensure that this programme is complied with, and include in the annual report an account of how the programme was met.

We consider quality of employment opportunity critical to creating a workplace that enables all our staff to contribute to their full potential. The principles and practice of equal employment opportunities are embedded in our human resources policies. Through our work on EEO, we aim to better understand how we can further promote equity and diversity in our workplace. For example, we have embedded a flexible working arrangements policy and guidelines, ensured that we have no gender pay bias for like-for-like roles, and are actively improving our Māori cultural competency, including use of te reo Māori.

Information about our staff numbers and staff diversity is provided in our staff profile on our website.

Image of a computer consoleOur knowledge, information, and methods

Our collective knowledge and expertise about the public sector, and the processes we use to do our work.

In many respects, our technology environment is struggling with growing service demand and complexity, and to meet the expectations of Parliament and our stakeholders – audit service providers, public organisations, and the public. We need to continue to ensure that systems are secure, resilient, and fit for purpose.

We know there is an opportunity to leverage the information that we acquire and hold to provide better intelligence to support our work planning and core services. It is also about ensuring that our systems support improved engagement with Parliament, public organisations, stakeholders, and the public. These things are key to delivering greater impact.


  • developed our Information Systems Strategy to focus our investment over the next five years, and started to implement it (with funding secured through Budget 2020);
  • replaced much of our core computing infrastructure, increasing security, resilience, and capacity, which enabled our staff to continue working remotely during the Covid-19 lockdown;
  • upgraded systems, including our document management system to improve functionality; and
  • invested in our ability to carry out data analytics, and started work on a Data and Knowledge Strategy.

Image for our relationshipsOur relationships

Our mutually productive and respectful relationships with all our stakeholders.

Our Office has a wide range of stakeholders, and our ability to manage these relationships well is important to our ability to influence and have impact.

Our engagement matters because we need to understand what our stakeholders are concerned about and where risks might arise. These insights help inform our work, allow us to target how we can best assist public organisations with the challenges they face, and shape how we communicate the key messages from our work to influence improvements to public sector practice.


  • normally hold regular all-day events for public organisations about governance and accountability, accounting and auditing developments, standards, issues, and opportunities. Due to the Covid-19 pandemic, these events could not be held. We recorded these sessions instead and made them publicly available so that governors, management, finance teams, and other public sector staff could continue to have access to information to help them in their work;
  • strengthened our relationships with public sector and audit profession groups by providing briefings and presentations on good practice, emerging risks, and sector insights;
  • provided post-election support to councils by presenting to 31 councils on matters such as managing conflicts of interest and the importance of risk management, including the role of audit and risk committees in this regard;
  • increased our focus on liaising with audit and risk committee chairpersons, including establishing new forums, both in person and virtually;
  • continued to provide briefings on reports for members of Parliament, as well as briefings for select committees; and
  • continued to collaborate with Transparency International New Zealand to host events in Wellington and Auckland focused on strengthening public sector integrity and transparency.

We aim to improve how we engage with and provide value for our stakeholders. To achieve this, we:

  • carried out surveys to better understand what Parliamentary select committees and other stakeholders consider we do well and where we need to improve; and
  • strengthened our relationships with Pacific audit offices by training staff in their offices and in ours in support of improving accountability, transparency, and good governance in the Pacific.

Image for our financial and physical resourcesOur financial and physical resources

Our use of financial and physical resources to support our work.

While the public sector has continued to grow, Crown funding to support the activities of the Office has been constrained for more than a decade. The Office has kept operating costs low, but this has had a range of effects. We have had to reprioritise funding to absorb salary increases and other inflationary pressures in an environment that was struggling with growing service demand and complexity to meet the expectations of our audit service providers, public organisations, and other stakeholders.

We secured additional funding in Budget 2019. This funding enabled us to substantially build our people capability, ensuring that we have the skills we need to deliver more, better and faster, addressing remuneration pressures and investing more in training and development. We also:

  • focused on working with our staff to make sure that we directed that investment in the right places, and that we were organised in a way that would make the most of additional resources;
  • reviewed some processes, streamlining our approach to triaging inquiries and making changes to the way our sector managers operate;
  • established new roles to help us strengthen governance, planning, reporting and project delivery;
  • completed a refresh of our offices in Wellington, upgrading the equipment our staff use to ensure that they have a modern, secure, and fit-for-purpose working environment;
  • continued to maintain our tight financial controls and carefully monitor spending, including reviewing our expenditure and priorities during the Covid-19 pandemic; and
  • reviewed our long-term arrangements for our offices in Tauranga and Hamilton, and started a review of our offices in Auckland.

In Budget 2020, we sought investment in our information technology systems to ensure that our staff have the tools they need. The changes we are making are described in more detail in this Part under "Our knowledge, information, and methods" on page 39.

Our use of natural resourcesOur use of natural resources

Our use of natural resources and managing the environmental impact of our activities.

In our view, New Zealanders expect the public sector to use all of its resources wisely – including the natural resources they consume – and that they work to minimise their impact on the environment as much as possible.

This applies equally to us. This is why in the past few years, we have been assessing the environmental impact of our activities and looking for opportunities to reduce or mitigate that impact.


  • have continued to implement recommended waste management improvements in our Wellington office from the audit that was completed by the Sustainability Trust in 2018/19;
  • presented regular features for staff on the Office's intranet. For example, we told staff how much paper we were using and encouraged less printing. This, combined with increasingly paperless meetings, has resulted in a 17% reduction in paper use;
  • are progressing the development of an environmental impact reporting dashboard for the Office, using the data we have gathered from suppliers; and
  • will also look for other opportunities to highlight and encourage ways to reduce our environmental impact (for example, through the use of technology reducing our need to travel to carry out audits and for training events).

1: According to Transparency International New Zealand, the New Zealand arm of the global anti-corruption agency.