Part 5: How well the public accountability system is working as a whole
An effective accountability system is critical to maintaining trust and confidence in the public sector and in government. We have an important role in supporting the public accountability system to meet New Zealanders' expectations today and in the future.
In 2021/22, our work on the integrity of public organisations, risk and resilience planning, and significant government investment decisions will continue.
Our work at a system level will also continue. This includes reviewing aspects of the implementation of the well-being agenda, understanding Māori perspectives on accountability, and influencing (where appropriate for us to do so) the direction of public sector reforms to strengthen accountability to Parliament and the public.
We intend to review and (where appropriate) comment on specific reforms in the public sector, for example, any further Public Finance Act amendments. We have a particular interest in how reforms will work to strengthen public sector performance and accountability, as well as how changes are planned, managed, and governed. Significant reforms have the potential to affect performance. We will be looking at how organisations are managing risks to service delivery, including through our annual audit work.
In 2021/22, we will also respond (where appropriate) to the Government's proposals to reform the health and disability sector.
Our work in 2021/22 on how well the public accountability system is working focuses on:
- implementing the well-being agenda;
- resilience and climate change;
- integrity in the public sector; and
- processes underpinning significant government investments.
1. Implementing the well-being agenda
Well-being is gaining increased emphasis throughout the public sector. The Public Service Act and Public Finance (Wellbeing) Amendment Act 2020 seek to support public sector stewardship of a set of long-term well-being outcomes.
The amendments will require the Government to set well-being objectives, the Treasury to report on the state of well-being at least once every four years, and public sector chief executives to prepare long-term insights briefings at least once every three years.
The Treasury is preparing a joint long-term fiscal statement and insights briefing in 2021/22 that will incorporate diverse views of well-being, including He Ara Waiora, a tikanga-based well-being framework. We will look at the overall approach the Treasury has taken, how well it meets the requirements of the Public Finance Act 1989 and the Public Service Act 2020, and the extent it helps Parliament understand the long-term fiscal challenges the Government is facing.
| Planned work for 2021/22 |
|---|
| Commentary on the Treasury's statement on the Government's long-term fiscal position and insights briefing |
| The Treasury plans to publish its statement on the Government's long-term fiscal position in September 2021. This year, the Treasury is incorporating well-being information from its first long-term insights briefing to the Minister of Finance, as required by the Public Service Act. The long-term insights briefing looks at the medium- to long-term trends, risks, and opportunities for New Zealand through the Treasury's fiscal stewardship lens. We will look at the Treasury's 2021 statement in terms of how well it describes what the state of the Government's finances might look like, given the range of challenges and opportunities the Government and the country might experience in the future. We also want to review how well the information needed for the insights briefing has been collected, summarised, and integrated into the statement about the Government's long-term fiscal position. |
2. Resilience and climate change
Central and local government have important roles in strengthening New Zealand's resilience to a range of risks and potential adverse events. Significant public money is spent on managing risk and strengthening New Zealand's resilience, whether that is responding to adverse events or recovering from them.
In 2022/23, we intend to look at the effectiveness of the emergency management system in planning for, responding to, and recovering from adverse events. Carrying out this work in 2022/23 will allow us to build on what we learn through our work in 2021/22 on the Covid-19 response and on Auckland's emergency management (to be reported in 2021/22). This work might also include a focus on cyber security. For example, we are interested in the extent to which public organisations are taking steps to improve their resilience to cyber threats, given the Government's cyber security strategy published in 2019.
A critical aspect of ensuring resilience to adverse events is understanding, planning for, and responding to the effects of climate change. Many public organisations have climate-related roles and responsibilities. In 2020/21, we focused on councils and their response to climate change. During our audits of the 2021-31 council long-term plans, we considered how councils are factoring climate change into their planning and proposed spending decisions, particularly for areas that might be more vulnerable to climate change effects in the future and for significant infrastructure projects. We also collected information about how many councils had declared climate emergencies and what actions they were planning in response.
In 2021/22, we will complete our analysis of the actions councils are planning and taking in response to climate change and report the results of this work.
In 2022/23, we will consider what other work we might carry out on the Government's response to managing climate change effects and reducing emissions under the zero-carbon legislation framework. This could involve looking at programmes to reduce emissions in particular sectors, the overall strategy to meet targets, and progress by public organisations in implementing the requirements of the Carbon Neutral Government Programme. We will also consider our role in providing assurance over climate-related reporting by public organisations.
| Planned work for 2021/22 |
|---|
| Climate change and local government |
| We will complete our analysis of the 2021-31 council long-term plans and other documents. Our work will establish how well councils are factoring climate change risks and vulnerabilities into their long-term planning, the climate-related actions they plan to take (both to reduce greenhouse gas emissions and to adapt to climate change), and any funding pressures or information gaps they have identified. We expect to report our findings in our report on the main matters arising from the audits of councils' long-term plans. |
3. Integrity in the public sector
For public organisations to operate effectively and achieve outcomes, it is essential that they have public trust and confidence. Establishing and maintaining that trust and confidence requires a high level of integrity, fairness, and openness. Where there is a question about any one of those, trust and confidence can erode. It is important that public organisations and their staff meet high standards of integrity.
In 2021/22, we will continue our work on integrity to help support public organisations. The fostering of integrity and ethical standards reduces the risk of corruption or wrongdoing, can lead to improvements in the quality of decision-making, and positively increase staff engagement.
We expect that our work will continue to involve collaboration with other integrity-focused organisations, where appropriate – for example, Te Kawa Mataaho Public Service Commission, the Office of the Ombudsman, Transparency International New Zealand, and the Serious Fraud Office. We will also engage with a wide range of other public organisations to encourage further discussion and promote good practice.
| Planned work for 2021/22 |
|---|
| Completion of integrity framework and guidance |
| Building on our work in 2020/21, we will complete and publish an integrity framework and guidance. Where we identify a need, we will publish other supporting integrity resources. |
| Looking at integrity processes in central government |
| We propose to carry out audits of several central government agencies to examine how well they are performing in relation to specific integrity issues. Our interest includes the role of senior leaders in supporting integrity practices in organisations. We might look at what expectations are set and how senior staff show how they are meeting them. This might include when senior staff exercise their discretion to approve exceptions to organisational policies. We are also interested in how organisations are building a culture of integrity. |
| Monitoring progress: Operation Respect (New Zealand Defence Force) |
| Operation Respect was launched in 2016. It is aimed at eliminating inappropriate and harmful behaviours and sexual violence in the New Zealand Defence Force (NZDF). In 2020, an independent review into the programme recommended that the Minister of Defence request the Auditor-General to carry out an audit of NZDF's progress on Operation Respect's specific outcomes every two years for 20 years. We will carry out the first audit in 2021/22. |
4. Processes underpinning significant government investments
In 2020/21, we expanded our focus on procurement to look more broadly at significant government investment decisions. It is important that public spending delivers value for money. The spending currently planned for a range of infrastructure projects is considerable. It will have debt implications for generations to come.
The Government Investment Strategy guides decisions about significant investments. There are 11 principles to guide decision-makers and those managing significant assets. The intent is to direct government resources to where they create the most value.
We are particularly interested in how effectively the systems and processes work to inform decisions and how decisions are communicated. Processes need to be fair and decisions need to be transparent.
Our work programme seeks to:
- increase the transparency of planning and decision-making processes for large-scale government investments (how does the Government decide what to invest in on behalf of New Zealanders?);
- identify opportunities to strengthen current public sector practice to ensure that the systems and processes underpinning large investments are effective and efficient; and
- understand how the emergency context of Covid-19 has affected government investment decision-making processes and identify any lessons learned.
In 2020/21, we published our work on the management of the Provincial Growth Fund (the Fund). In 2021/22, we intend to report on the reset of the Fund after the Fund investments were reprioritised to focus on the recovery from Covid-19.
In 2021/22 we will complete our work looking at the processes that have underpinned the significant investments the Government has made in the New Zealand Upgrade Programme and the shovel-ready fund. We originally planned to follow up this work by looking at the effectiveness of Treasury's investment management system in supporting significant infrastructure investments in 2021/22. After receiving feedback on our draft annual plan, we have decided to defer this work to 2022/23.
In 2022/23, we also plan to publish what we have learned from our procurement-related work.
| Planned work for 2021/22 |
|---|
| Provincial Growth Fund: Reset of the Provincial Growth Fund and reprioritisation of investments |
| The Provincial Development Unit in the Ministry of Business, Innovation and Employment has reprioritised investments of the Provincial Growth Fund to focus on the recovery from Covid-19. We expect to report on the reset in 2021/22. The work is intended to:
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| Systems and processes underpinning government decisions on major infrastructure investment |
| In late 2019, the Government announced its $12 billion New Zealand Upgrade Programme. In May 2020, the Government announced that the COVID-19 Response and Recovery Fund had set aside $3 billion to fund infrastructure projects across the country. This portion of the fund is commonly referred to as the shovel-ready fund. The fund is targeted towards infrastructure investments that can enable immediate job creation, generate other public benefits, and have construction activity under way within 12 months. We intend to complete our performance audit to assess the effectiveness of the decision-making systems and processes that have underpinned investment decisions for the New Zealand Upgrade Programme and the shovel-ready fund. |