Auditor-General's overview

E ngā mana, e ngā reo, e ngā karangarangatanga maha o te motu, tēnā koutou.

Public organisations are responsible for reporting their performance to Parliament and the public in a way that meaningfully reflects their organisation's aspirations and achievements. This is an important aspect of New Zealand's public accountability system.

It is reasonable to expect that New Zealanders want the opportunity to understand what has been achieved with their rates and taxes. Our own research supports this.

Over the past three decades, considerable time and effort has been spent providing regular reports on the performance of public organisations to Parliament and the public. Significant resources are invested in ensuring that reports are carefully prepared, audited, and published. Despite this, there are still criticisms about the relevance, accessibility, and usefulness of publicly reported information.

In the work my Office does, we regularly see public organisations struggle to clearly explain what they do and how well they do it. Much of the reporting about performance is focused on what is important to the organisation rather than on what matters to the people they serve.

In my view, the first step in preparing a meaningful story about public sector performance is to understand what people want to know about public organisations, their services, and their contribution to New Zealanders' well-being. The next step is being able to clearly describe (and ideally measure) the difference that each public organisation is seeking to achieve in terms of improved outcomes for the communities it serves.

Although this paper is focused on the quality of reported performance, it also points to an underlying question about the management of performance. If public resources are being directed and managed well, public organisations should be able to tell a clear and compelling story about how they deliver value and contribute to the outcomes that are important to New Zealanders.

Good performance information is required at an organisational level, across sectors, and at a whole-of-government level. Those who lead and manage public organisations, those who are charged with monitoring public organisations, those who prepare performance information, and those who audit it all play a part in developing better performance information.

Those who have responsibilities in supporting the whole system also need to do more to ensure that the legislation, standards, and guidance provide an adequate framework and the right incentives to drive good performance reporting.

The current plans to reform public services (including for example to the health system and water management) provide an important opportunity to make improvements.

Changes that make it easier to deliver services are not enough – the services themselves need to contribute to improved outcomes for New Zealanders. Parliament and the public will only know that this is being achieved if it is measured, monitored, and reported in a way that is relevant and accessible.

In my view, improving public accountability must be a key consideration in any reform.

This discussion paper explores five areas for improvement:

• ensuring that performance information is focused on the issues that matter to New Zealanders;
• ensuring that performance information is tailored to different audiences to make it more accessible;
• better integrating and aligning performance information so it is clear how the activities of public organisations contribute to outcomes;
• improving monitoring and scrutiny of the performance information that is produced to encourage continuous improvement; and
• building demand for good quality performance information, strengthening system leadership, and investing in the capability to do it well.

I also encourage Parliament to reflect on its own role in supporting these improvements. Parliament can require more from public organisations. It can demand better quality information that is focused on what matters to New Zealanders.

Improved performance reporting must be seen as a priority if we are to address the many complex, long-term, and difficult problems facing New Zealand and improve accountability of the public sector.

Nāku noa, nā

John Ryan
Controller and Auditor-General

20 October 2021