Part 3: Our organisation development plan
As well as our strategy, we are also making changes to strengthen our organisation and lead by example. The changes we are making are set out in our organisation development plan and are summarised below.
Our organisation development plan directly relates to the bottom section of our performance framework. There are six key areas that we must manage well:
By focusing on strengthening the way we manage these resources, we will ensure that we are in the best possible position to carry out our core functions to the standard that Parliament and the public expects, and deliver on our strategy.
We provide more detail below about how we propose to strengthen our organisation in each of these six areas.
Our independence and reputation
Our independence and strong mandate that underpin all our work and activities
Why this is important to us
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 enhanced further during the last 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 enables us to maintain our position as one of the pillars in New Zealand's national integrity system.3
What we have been working on
We continue to actively monitor and manage potential conflicts of interest for our staff and of the audit service providers appointed to carry out audits on behalf of the Auditor-General. We recently implemented stronger auditor independence standards, limiting the consultancy work of audit service providers for public organisations to work of an assurance nature only for the public organisations they audit.
What we will focus on next
Work we are planning to further strengthen our independence, reputation, and mandate includes:
- maintaining a strong focus on risks to our independence and reputation in our strategic risk register;
- looking at how we can improve the technology that supports our independence declarations processes to make this easier to manage, and improve the training we provide to new staff about how we manage independence and conflicts of interest; and
- continuing to examine areas of the Public Audit Act 2001 that we consider could be strengthened, changed, or clarified.
Our people
Our culture and engagement, skills, and capability that enable us to deliver high-quality professional work
Why this is important to us
A positive culture and strong engagement will help people perform at their best. The reputation of the Office relies on our ability to attract and retain capable and highly skilled staff.
What we have been working on
Over the past year or so we have worked to make several improvements to support our people. We prepared a people strategy and a Te Ao Māori strategy. We have established a forum for people leaders (those who manage staff) and we have introduced career boards to help staff in the OAG and Corporate Services to identify and progress their career paths and capabilities. We have 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.
We are investing in our capability and competence in engaging with Māori – staff have access to te reo Māori courses and many have been encouraged and supported to learn their pepeha. Specific training is available for staff working with public organisations where tikanga Māori is fundamental to how they operate.
We have also improved our flexible working arrangements and published an equal employment opportunities programme. We have reviewed the remuneration and reward system for staff in the OAG and Corporate Services, and reviewed the pay structure for Audit New Zealand. We have also 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.
What we will focus on next
We are planning further work to support our people, including:
- completing an Office-wide learning and development plan that supports people's technical, leadership, and professional needs;
- further implementation of our people strategy, including:
- reviewing the people and capability operating model, incorporating an end-to-end review of our recruitment practice and strategic recruitment;
- developing a capability framework that includes identifying and recruiting for critical future skills; and
- developing and implementing a leadership capability framework and tools.
We are also planning further implementation of our Te Ao Māori strategy, including:
- assisting with creating an organisational culture that fosters te reo Māori and tikanga Māori; and
- ensuring that all staff have basic knowledge of te reo Māori.
Our knowledge, information, and methods
Our collective knowledge and expertise about the public sector, and the processes we use to do our work
Why this is important to us
In many respects, our technology environment is struggling with greater 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 our systems are secure, resilient, and fit for purpose.
We know there is an opportunity to better use 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 critical to delivering greater impact.
We also want to make sure that our staff are equipped to do their jobs by ensuring that the right technology and tools are available to support our services.
What we have been working on
We have made many improvements in recent years. We have replaced much of our core computing infrastructure, increasing security, resilience, and capacity. We have improved functionality for our staff by upgrading systems, including improving our document management system. We have invested in our data analytics function and started work on a data and knowledge strategy.
In the past year, we have also carried out a full review of our information technology systems. This work highlighted that, despite the improvements we have been making, we still have some important systems to work on.
We have several processes that are not appropriately supported by information systems or technology, and significant time and manual effort is spent administering them. Some of our core systems require major lifecycle upgrades or replacement in the next five years and others are no longer functionally fit for purpose.
What we will focus on next
We now have an Information Systems Strategy and Plan to guide our investment in the next five years. We have secured funding to support the implementation of this Plan. Priorities include:
- systems to support greater insight and improved engagement – a better business intelligence platform, improved ability to acquire, store, and share data, an enhanced self-service portal for appointed auditors and public organisations, and improvements to our websites;
- critical processes supported by appropriate technology – improved case and evidence management systems, introducing workflow to other key processes, and improved collaboration tools;
- a more secure, modern, and resilient technology environment – replacing systems that are no longer fit for purpose, enhancing our cyber security environment, and preparing a strategy to move some services into "the cloud"; and
- completing a data and knowledge strategy that is aligned with the Information Systems Strategy and Plan.
Our relationships
Our mutually productive and respectful relationships with all our stakeholders
Why this is important to us
The Office has a wide range of stakeholders, and our ability to manage these relationships well is important to our ability to influence and be effective. Our relationships are critical to our strategy.
All of the shifts we are trying to make as an organisation require us to be proactively engaging with others to communicate key messages from our work and to assist public organisations with the challenges they face.
What we have been working on
In the past three years we have been focusing on stakeholder engagement plans to guide the way we manage our relationships externally. We have:
- carried out surveys to better understand what we are doing well and where we need to improve from the perspective of public organisations and other stakeholders;
- strengthened our relationships with public sector and audit profession groups by providing briefings and presentations on good practice, emerging risks, and sector insights;
- held a series of events for the government procurement community, so practitioners and decision-makers could hear from leaders of some of New Zealand's biggest procurement projects;
- started providing briefings on reports for members of Parliament, as well as our briefings for select committees; and
- increased our focus on liaising with audit and risk committee chairpersons, including establishing new forums starting in 2019/20.
Audit New Zealand has continued to provide a series of all-day events for public organisations in five cities, so governors, management, finance teams, and other public sector staff could hear about the latest governance and accountability, accounting, and auditing developments, standards, issues, and opportunities. The OAG has continued to collaborate with Transparency International New Zealand to host events in Wellington and Auckland focused on strengthening public sector integrity and transparency. We have also enhanced our relationships with Audit Offices in the Pacific by training staff in their offices and in ours in support of improving accountability, transparency, and good governance in the Pacific.
What we will focus on next
In the coming years we will further develop out stakeholder engagement strategy. We will focus on strengthening our partnerships with audit and risk committees, the Institute of Directors, and other organisations whose objectives align with ours.
We will continue to implement a more purposeful and targeted approach to the way our sector managers engage with public organisations, with clear objectives and plans to guide these relationships. We will support our staff with improved training and tools to help them build and maintain effective relationships.
We will also focus on strengthening our internal relationships – across the Office, between the OAG and Audit New Zealand, and with our other audit service providers.
Our financial and physical resources
Our use of financial and physical resources to support our work
Why this is important to us
Although the public sector has continued to increase in size, until recently Crown funding to support our activities has been constrained for more than a decade. We have kept operating costs low, but this has had consequences. We had to reprioritise funding to absorb salary increases and other inflationary pressures, and this resulted in an environment that was struggling with increasing service demand and complexity, and struggling to meet the expectations of our audit service providers, public organisations, and other stakeholders.
What we have been working on
In 2019, we submitted the first of a two-phased investment plan to Parliament seeking additional funding to support the Office to deliver on our strategy.
Phase one (Budget 2019) focused on building our people capability – making sure that we have the skills we need for the future, addressing remuneration pressures, and investing more in training and development.
We also sought investment in areas to help us to deliver more, better, and faster, including more resources for project management and business process improvement, as well as for areas where demand has been growing, such as work focused on Auckland and the Pacific.
Phase 2 (Budget 2020) sought investment in our information technology systems to ensure that our staff have the tools they need. Changes we are making to our information technology systems are described in more detail earlier under Our knowledge, information, and methods.
Last year, we worked with staff to make sure we directed that investment in the right places, and that we were organised in a way that would make the most of additional resources. We reviewed some processes, streamlining our approach to inquiries and making changes to the way our sector managers operate. We established new roles to help us strengthen governance, planning, reporting, and project delivery. We started to refresh our offices in Wellington, upgrading the equipment our staff use to ensure that they have a modern, secure, and fit-for-purpose working environment.
What we will focus on next
Looking forward, we will continue to maintain our tight financial controls and carefully monitor spending. This will include reviewing our expenditure and priorities in the light of the Covid-19 pandemic. We also need to determine long-term arrangements for our office location in Auckland and upgrade Audit New Zealand offices, as funding allows.
Our use of natural resources
Our use of natural resources and managing the environmental impact of our activities
Why this is important to us
In our view, New Zealanders expect the public sector to use its resources wisely – including the natural resources they consume – and that they will work to minimise their impact on the environment as much as possible.
This applies equally to us. 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.
What we have been working on
In recent years, we commissioned the Sustainability Trust to carry out a sustainability audit for our Auckland, Wellington, and Christchurch premises. We have implemented the recommended waste management improvements in all of our offices around the country.
We have also arranged information sessions for managers, set up an online resource centre, and produced a range of guides, all with the aim of reducing our environmental footprint. We 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, and we promoted keep-cups. This, combined with increasingly paperless meetings, has resulted in a 17% reduction in paper use.
What we will focus on next
There is more we want to do. We have gathered data from our suppliers to collate a baseline of the Office's environmental footprint and we plan to create an environmental impact reporting dashboard using the data we have gathered from suppliers. We will also look for opportunities to highlight and encourage support for this work through our graduate induction and key internal events.
3: According to Transparency International New Zealand, the New Zealand arm of the global anti-corruption agency.