Part 2: What shapes our annual plan

Annual plan 2021/22.

Our strategic intentions provide the context for our work

The Auditor-General's strategic intentions to 2025 is our long-term strategic planning document. It sets out the outcomes and impacts we are working towards. It also provides the strategic context for our Annual plan 2021/22.

Our vision is of a high-performing and an accountable public sector. The ultimate outcome we seek is that Parliament and the public have trust and confidence in the public sector, as shown in our performance framework below.

Our performance framework.

Our medium-term strategy for 2018-2021 describes how we will build our core functions and what we will do differently to achieve our outcomes and impacts. These intentions provide the context for the work described in our annual plan.

Risks to achieving the work in our annual plan

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

  • we do not have sufficient capacity or capability to do all the work;
  • some unforeseen event disrupts or delays our work;
  • we do not achieve the right balance in quality, timeliness, and cost of our work; and
  • we do not achieve the impacts we are aiming for.

Our planning helps to mitigate these risks and regular reviews let us respond and adjust if new priorities arise. Our business continuity planning minimises the chance that unforeseen events will disrupt our work.

Many sources inform our decisions about what work to include

We carefully consider what work to include in our annual plan. We draw on a range of information sources to help identify and prioritise the work we include.

As the auditor of every public organisation in New Zealand, we have an ongoing role with every public organisation. This allows us to consider performance and accountability matters for the whole public sector. We regularly assess the issues, risks, and opportunities we see throughout the public sector. Our assessment is informed by the information our auditors and sector managers continually gather, our ongoing monitoring of risks, and our independent analysis of public sector performance and issues.

We also draw on our previous work and knowledge – reports we have published (including inquiries, research reports, and the results of recent audits) and information from our follow-up reports on how public organisations have implemented our recommendations.

Our central and local government advisory groups help us better understand the common themes and issues in their respective sectors. Our discussions with select committees and members of Parliament are also important sources of information.

The consultation process for our draft annual plan, enabling input from Parliament, the broader public sector, and directly from members of the public, also helps to prioritise our work.

We use all this information to help determine what work to include in our annual plan. The work that we intend to do is based on information we know at present. If new information or risks come to light, we might decide to change some of our planned work.

The environment in which we work is an important consideration

Covid-19 has shown New Zealand’s vulnerability to global risks.

The public sector is seen as generally free of corruption and has strong transparency and accountability arrangements. New Zealanders have access to high-quality public services that are generally reliable and well managed. Our work on independently auditing the financial statements of the Government shows that our public financial management system remains strong.

However, the public sector is under significant and ongoing pressure due to the need to respond to both the global pandemic and to a large reform agenda, while maintaining existing services. Despite this, trust and confidence in the public sector remains high while expectations of government continue to increase.

Effects of Covid-19

Covid-19 has shown New Zealand's vulnerability to global risks and the challenging and changing environment in which we operate. The full effects of Covid-19 continue to unfold. There will be ongoing challenges facing the public sector, especially if there are further outbreaks of Covid-19 in the community. The Covid-19 vaccination programme will continue to be a critical government initiative in 2021/22. How well the vaccination programme is delivered will be important to maintaining New Zealanders' trust in public services and in government.

Government spending during the Covid-19 response has been significant – for example, the Business Support Subsidy Scheme, the Small Business Cashflow Scheme, and shovel-ready projects form part of the $62 billion of funding available for the Government's spending on responding to Covid-19. Recovery from the effects of Covid-19 remained a key element of Budget 2021. It is important that the Government is transparent about the Covid-19-related spending and what it has achieved with it. Good quality decision-making, value for money, integrity, and effective monitoring and reporting practices are essential, particularly when large expenditure is occurring quickly and in new ways.

Some services were already under pressure before Covid-19 – for example, elective surgery. How public organisations are planning their response to, and recovery from, Covid-19 and how they position themselves to be successful in a post-vaccination environment will be important. Scenario planning and other ways to manage risk and uncertainty will also be important.

A well-functioning housing system requires multiple agencies to work effectively together.

Loss of revenue and financial stability are serious issues for some sectors – for example, in tourism, hospitality, transport, and education. Long-term planning of economic and other initiatives becomes even more important, especially when considering scenarios of further outbreaks or other major risk events.

Despite New Zealand's generally successful response to Covid-19, the long-term effects on New Zealand and its place in the world are yet to be fully seen.

Climate change

There are significant and increasing estimates of the cost of adapting to and mitigating the effects of climate change.

The transition to a zero-carbon economy will require effective leadership, governance, and accountability arrangements. The risks, strategy, and financial effects of this transition will need to be transparent. The level and speed of change that might occur will be a challenge for many public organisations.

The public sector's contribution to the Government's emissions reduction targets will require focused efforts to reduce emissions and enhanced reporting for many public organisations. Enhanced climate-related disclosure and assurance requirements are also expected for companies that operate in financial markets, including a small group of public organisations. We will prepare for a likely assurance role over the greenhouse gas emission disclosures by those public organisations.

We will also continue our work on measuring and reporting our greenhouse gas emissions as a voluntary contribution to the Carbon Neutral Government Programme. We will continue to consider the role we might play in assessing how public organisations are meeting the programme's requirements.

Māori-Crown relations

The public sector is increasing its focus on strengthening its relationship with Māori. It is also seeking to improve its competency in working with, and responding to, iwi and hapū. This includes policy formulation and areas such as water management and health. However, current capability in the public sector to respond is still developing.

Accountability expectations about progress with strategies and programmes specifically designed to improve outcomes for Māori, as well as for more general spending that affects outcomes for Māori, are increasing. Many reforms (for example, water, health, and the Resource Management Act) are of particular interest to Māori.

The Public Service Act 2020 introduced a range of obligations for the public service to actively work with Māori. It will be important to understand how these changes are being led and implemented as the public service begins to work under this new Act.

Local government challenges

Councils continue to face change. New regulatory requirements and instruments (for example, new and updated national policy statements) have been introduced and other changes are proposed, including the "three waters" and resource management reforms. These changes could significantly affect the shape of local government. Councils are also considering the impact of climate change and what this means for the delivery of services over time.

Councils have received Covid-19-related funding (for example, shovel-ready funding). As with other organisations receiving Covid-19 funding, it will be important for councils to monitor the effectiveness of their spending and publicly report on it.

System-level changes and public service reforms

Public sector organisations continue to prepare cross-agency and sector strategies and initiatives to respond to long-standing issues, such as family violence and sexual violence. Public organisations worked well together to respond to Covid-19 (and have worked well together in response to other crises) due in part to having a compelling focus.

There have been important changes to legislation, in particular the enactment of the Public Service Act. This Act enables new ways of working across the public sector. This will, in some instances, require new accountability arrangements to be defined. However, improved performance reporting at the entity, sector, and, where appropriate, initiative level, as well as at an all-of-government level, will be important for New Zealanders to clearly see the effectiveness of government spending and performance against priorities, no matter how the public sector chooses to organise itself.

Recently announced reforms in the health sector will also bring new organisational structures and accountability arrangements.

fraud and integrity risks increase when a significant amount of new money enters the system with expectations of fast delivery.

We intend to continue our work to track and better understand reported performance across various sectors. This will enable us to provide a future assessment about the outcomes achieved from the changes and reforms currently being implemented across the public sector.

Infrastructure investment and management

There was significant central government investment in infrastructure before, and as part of, the Covid-19 response. There were also significant levels of investment in infrastructure announced as part of Budget 2021.

Councils are also proposing significant infrastructure investments. Demographic changes are putting increased pressure on high-growth areas, making the work that the New Zealand Infrastructure Commission Te Waihanga (Te Waihanga)2 is doing on infrastructure strategic planning more important.

Historical under-investment in infrastructure has attracted increased public attention after some highly visible asset failures and service disruptions. Public expectations for a clearer picture on asset condition, as well as plans and strategies for funding and financing infrastructure investment (in both central and local government) are increasing.

Housing sector

Housing is important for social and economic well-being. The lack of a stable home is linked to poorer life outcomes and can adversely affect community cohesion.

Housing supply and affordability is a significant and complex issue. Higher house prices and rents have adverse effects on many households, particularly those on low incomes. Funding for housing and urban development initiatives were a major part of Budget 2021.

A well-functioning housing and urban development system requires multiple agencies from central and local government to work effectively together. Te Tūāpapa Kura Kāinga Ministry of Housing and Urban Development has oversight of the system. Other central government agencies with significant housing functions include Kāinga Ora Homes and Communities (Kāinga Ora) and the Ministry of Social Development Te Manatū Whakahiato Ora (Ministry of Social Development). Positive housing and urban development outcomes also rely on public organisations involved in the planning and provision of physical and social infrastructure, such as Waka Kotahi NZ Transport Agency (Waka Kotahi) and the Ministry of Education Te Tāhuhu o te Mātauranga (the Ministry of Education).


Cybersecurity threats remain a critical risk to public sector delivery, integrity, and ultimately the trust and confidence the public has in the public sector. Significant ongoing investment in cybersecurity will continue to be a feature of many public organisations, although risks will always remain.


In some sectors, there are capability gaps and disconnection between training and the skills needed. In particular, there are issues with the education workforce, the health workforce, and for a number of trades. The reform of the institutes of technology and polytechnics sector is intended to improve the vocational education system for better delivery of work-integrated skills for learners, employers, and communities.

Although strategic planning and building infrastructure will remain important, Covid-19 has helped drive new ideas for workforce planning, including flexible working and changed approaches to workforce well-being and capability. Border restrictions are also affecting some sectors, resulting in shortages of skills traditionally brought in from offshore.

Ethics and integrity

New Zealand's public service has a well-deserved reputation for integrity. However, fraud and integrity risks increase when a significant amount of new money enters the system with expectations of fast delivery.

Sexual harassment and bullying remain workplace issues in the public sector. Despite genuine attempts to address them, reviews continue to show that current efforts to reduce sexual harassment and bullying are not always effective.

Family violence and sexual violence

Family violence and sexual violence are widely recognised as complex problems. These crimes persist despite the efforts of successive governments, government agencies, and numerous community organisations working with those who are either harmed by or perpetrators of violence.


Attaining social and economic equity for Māori and Pasifika continues to be a challenge. Outcomes continue to be consistently and significantly lower than other groups, while gender inequalities and geographical inequities also persist.

The economic impact of Covid-19 places lower socio-economic groups at greater risk.

Unemployment rates remain high for sections of the population. Children who live in poverty have significantly worse health and educational outcomes than other children. Many people with disabilities face reduced opportunities, with poorer life outcomes compared with non-disabled people.

Five priority areas for our work in 2021/22

Given all these considerations and the feedback we received on our draft annual plan, we have determined five priority areas for our work in 2021/22:

In the pages that follow, we describe in more detail the work we plan to carry out under each of the five priority areas. Appendix 3 provides a summary of our work planned for 2021/22 and the timing for that work.

2: Many government agencies have both English and Māori names. We list both, where available, then use the form that each agency predominantly uses on its website.