Part 2: What shaped our work in 2020/21

Annual report 2020/21.

Our strategic direction provides the context for our work

The Auditor-General's strategic intentions to 2025 is our long-term strategic planning document. It sets out the impacts and outcomes we are working towards. Our medium-term strategy for 2018-21 describes how we will build on our core functions and what we will do differently to generate the impact we need to achieve our outcomes.

Our strategy is organised around four strategic shifts we need to make to respond to the changing operating context we work in and to enhance the impact of our activities. The four strategic shifts are:

  1. focus more on examining how well the public sector achieves positive change for New Zealanders;
  2. help New Zealanders become better informed about public sector performance and accountability;
  3. be more active in sharing insights about what "good" looks like; and
  4. help improve the public sector accountability system.

We describe the progress we have made on our strategic shifts in the performance results for the services we deliver.

Our organisation development plan for 2018-21 describes the main areas we intend to focus on to improve our organisation and support the delivery of our strategy (see Part 4).

Our Annual plan 2020/21 sets out our discretionary programme of work for the year. In this report, we describe our progress against our annual plan, including our work on providing assurance to Parliament and the public on the response to, and recovery from, Covid-19. We regularly review the work in our annual plan so that it remains relevant and responsive to the dynamic and changing operating environment. Appendix 5 provides a summary of progress made during the year on the work plan set out in our annual plan for 2020/21.

Collectively, our strategic intentions, strategy, organisation development plan, and Annual plan 2020/21 shaped our work in 2020/21. This annual report reviews our progress in 2020/21 in the context of our changing operating environment.

The key strategic risks we manage

Our key strategic risks are:

  • loss of independence;
  • audit failure;
  • loss of capability; and
  • loss of reputation.

We manage these risks through the processes that support our work. In addition, our Audit and Risk Committee provides further insight and advice to help us manage risk. The Committee's report for the year ended 30 June 2021 is included as Appendix 1.

Managing the effects of Covid-19 on our work

Covid-19 has continued to affect us as well as many of the public organisations we audit.

In keeping with our role, we have been monitoring spending related to Covid-19. There is considerable public interest in how funding has been allocated to, and spent on, the Government's Covid-19 initiatives.

Good quality decision-making, value for money, integrity, and effective monitoring and reporting practices are essential. When large amounts of money are spent quickly and in new ways, it is important for the Government to be transparent with its spending and what it has achieved with that spending.

The effects of Covid-19 on our annual audit work

During 2020/21, Covid-19 affected our ability to carry out annual audits of public organisations, often because of organisational closures during lockdown. People in the public organisations that we audit needed more time to prepare the material that we need. Covid-19 has also increased the complexity of many annual audits.

In 2020/21, deadlines for all annual audits were extended as public organisations were allowed more time to meet their annual reporting obligations. The closure of New Zealand's border from March 2020 affected the ability of the auditing profession to secure enough auditors – both for short-term work and as permanent employees.

There is no short-term solution to the current industry-wide shortage of auditors. Together with the broader auditing profession, we are actively working on a range of longer-term measures to address this shortage.

Given the ongoing auditor shortage, Parliament has again extended the statutory reporting time frames for some public organisations by two months. The extension mostly affects Crown entities, councils, and council-controlled organisations with 30 June balance dates and will apply in both 2021 and 2022.

The effects of Covid-19 on our performance audits

In 2020/21, we committed to an ambitious work programme. Covid-19 contributed to delays with some of our performance audits, with some completed after 30 June 2021.

One piece of new work not included in our Annual plan 2020/21 looked at preparations for the nationwide roll-out of the Covid-19 vaccine, which is the largest immunisation programme ever carried out in New Zealand. We concluded that, to achieve the Government's overall goals, a significant scale-up was still needed. At the time of our review, we were not confident that the Government would achieve its vaccination goals for 2021.

We also reported on our review of the Ministry of Social Development's management of the Wage Subsidy Scheme.

The effects of Covid-19 on staff well-being

Covid-19 continued to affect our staff in 2020/21. Our people were able to work from home during the lockdowns but for many this proved to be challenging. Our Auckland-based staff were the most affected by periodic lockdowns in that region.

During 2020/21, we were mindful of the impact of working under lockdown. We made sure we had systems and processes for our people to manage not only their scheduled work through the already established process of remote audits, but also the impact of rapid change. We provided customised well-being tools that recognised these diverse operating conditions to support people during these challenging times.

Covid-19 has also created opportunities for staff. We delivered training remotely that we would normally deliver in person in the Pacific, and held the first-ever virtual PASAI Congress.

We have taken what we learned from our response to the Covid-19 lockdowns and applied it to the way we work now. More of our people are working flexibly and staff travel has also reduced. Our in-house information technology expertise supports this flexibility.