Part 4: How well the public accountability system is working as a whole

Annual plan 2022/23.

An effective accountability system is critical to maintaining trust and confidence in the public sector and in government. Specific work we intend to carry out in 2022/23 will focus on:

  1. accountability of the public sector to Māori;
  2. how well the public sector is planning for the future;
  3. integrity in the public sector; and
  4. reporting on well-being.

If these areas are not managed well, the public accountability system or public trust and confidence in that system could, in our view, be significantly undermined.

We are also interested in how reforms will strengthen public sector performance and accountability and how these changes are planned, managed, and governed. We intend to keep a watching brief on the accountability arrangements made as part of the major public sector reforms, particularly in health, three waters, and tertiary education.

1. Accountability of the public sector to Māori

In 2021/22, we commissioned research on Māori perspectives on public accountability. This research is part of our broader programme of work on how the accountability system as a whole is working for New Zealanders. It will improve our understanding of Māori perspectives on how the public sector can build trust with, and be more accountable to, iwi, hapū, and whānau and inform our plans to strengthen our organisation's relevance to Māori.

In 2022/23, we also expect to complete the performance audits we started in 2021/22 looking at how effectively the public sector is contributing to improved outcomes for Māori and supporting the Whānau Ora approach.

Planned work: Understanding how well the public sector is delivering outcomes that matter for Māori
We will complete the performance audit we started in 2021/22 to identify areas of significant investment targeted toward improving outcomes for Māori and compare that with what has been achieved.

We intend to provide better transparency over government spending on initiatives designed to support improved outcomes for Māori. We will look at how effective the structures and resources are that are needed to deliver the intended outcomes, and provide a better understanding of the results that are being achieved. We will talk with Māori and stakeholders who are involved in delivering selected initiatives (for example, community organisations funded to deliver programmes and services associated with the initiative) or who take part in the programmes or services being delivered and for whom any benefits are intended.

We are focusing on four initiatives. These are:
  • He Poutama Rangatahi – administered by the Ministry of Social Development;
  • the Māori Agribusiness Extension (MABx) programme – administered by the Ministry for Primary Industries Manatū Ahu Matua; and
  • Te Ahu o te Reo Māori and Whānau Engagement – both administered by the Ministry of Education.
Planned work: How effectively the public sector is supporting the Whānau Ora approach
We expect to complete our work to provide an independent view on how effectively the public sector is supporting the Whānau Ora approach. Our work will consider how well Te Puni Kōkiri is exercising its leadership role for the Whānau Ora approach, and how well public organisations support Whānau Ora services and broader whānau-centred approaches to policy and service delivery.

The public sector has an important role in building meaningful and effective relationships between Māori and the Crown. Key to public organisations building and maintaining these relationships is honouring commitments the Crown made through Treaty settlements.

In 2022/23, we intend to look at how prepared public organisations are to meet their Treaty settlement obligations. We will look at the systems for overseeing Treaty settlements and monitoring the Crown's honouring of settlement commitments.

This work could help key public organisations, such as Te Arawhiti and Te Kawa Mataaho Public Service Commission, identify how they can better support other agencies to meet their Treaty settlement obligations. Where relevant, our sector managers will also be actively seeking information about how agencies are implementing settlement obligations, and keeping Parliament's select committees informed of progress as part of our Estimates and Annual Review briefings.

Planned work: How well prepared are public organisations to meet Treaty settlement obligations
We will look at and report on the complex system of Treaty settlement commitments. Our work will include who oversees and monitors the honouring of the Crown's commitments, what support is available to help public organisations meet their obligations, and what happens when commitments are not honoured in a timely and complete way.

We intend to examine whether public organisations know they have obligations and understand what they need to do to fulfil them. We will also look at the role of key public organisations (such as Te Arawhiti and Te Kawa Mataaho) in supporting the honouring of the Crown's Treaty settlement commitments.

2. Planning for the future

Public organisations need to plan adequately for the future and communicate these plans to New Zealanders through accountability documents and other reports. In 2022/23, our focus will be on cyber security, significant investments, and climate change.

Infrastructure resilience (including cyber security)

New Zealanders rely on public infrastructure for our everyday well-being, including for healthcare, communications, transport, and utility supply, such as water and electricity. Given this reliance, it is important that the infrastructure is resilient and can continue operating through various threats, such as cyber security and climate change.

In 2022/23, we intend to carry out work looking at the governance of cyber security risk preparedness and response in selected public organisations.

Planned work: Cyber security maturity and preparedness
Information security is becoming increasingly complex as technologies continue to evolve. It can be challenging to keep up to date with the risks associated with them.

Managing information security risk well is essential to protect the public sector's critical information assets. Information security failures can undermine public trust and confidence in the public sector. It is important that government departments, Crown entities, and local authorities have an effective approach for managing this risk.

In 2022/23, we intend to carry out a performance audit to understand how well a number of selected public organisations govern cyber security risk preparedness and response within their organisations to protect the information they hold. That work will include looking at the extent to which that governance relies on, and is informed by, the Protective Security Requirements, including the work of the National Cyber Security Centre6 and other relevant public sector organisations.

Significant investments

In recent years, we have carried out work that looks at the processes supporting investment decisions. We have looked at the Provincial Growth Fund and the Strategic Tourism Assets Protection Programme. In early 2022/23, we expect to complete follow-up work on the Provincial Growth Fund to look at the reprioritisation of investments to focus on Covid-19 recovery.

In 2021/22, we started work looking at the investments the Government has made through the New Zealand Upgrade Programme and shovel-ready fund. Both are major infrastructure investments. We are assessing the effectiveness of the systems and processes that underpinned the decision-making for these investments. We will complete this work in 2022/23.

We had originally planned to look at how recent and planned infrastructure investment is aligned to Te Waihanga's recently released infrastructure strategy, and how strongly New Zealand's climate change commitments are reflected in infrastructure planning. After receiving feedback on our draft annual plan, we have decided to defer this work to 2023/24. This will give public organisations an opportunity to consider and respond to the infrastructure strategy first.

In 2023/24 we will also consider developing a reflections report to highlight key themes of our work looking at decision-making systems and processes.

Planned work: 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.

In 2022/23, we will complete our performance audit assessing 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.

Local government climate action

Reflecting the international consensus that urgent action is needed to respond to climate change, New Zealand has a legislated target of net zero greenhouse gas emissions by 2050. The Carbon Neutral Government Programme has a more immediate target of net zero emissions by 2025. Both targets will require significant transformation and change in Government operations and across all sectors of the economy.

The actions required to meet the targets, and which organisations will need to carry them out, will become clearer as the Government confirms its policy responses and strategies for reducing emissions and adapting to the effects of climate change.

Local government will play a significant part. Councils have an important role in understanding, planning for, and responding to the effects of climate change. In 2021/22, we looked at the 2021-31 long-term plans to see how councils are preparing to respond to climate change, including the councils that had declared climate emergencies.

In 2022/23, we intend to take this work further by examining and reporting on the readiness of the local government sector to respond to climate change. We will focus on the actions councils are taking to respond to climate change, including what specific commitments have been made, how those commitments are prioritised and reflected in council plans, and whether the councils are supported by appropriate funding, governance, and accountability arrangements.

After we have completed this work, we will also consider work looking at how central government is preparing to respond to climate change.

Planned work: Climate change and local government
In our 2021/22 audits of the councils' long-term plans 2021/31, we considered how councils are factoring climate change into their planning and proposed spending decisions, particularly for areas that might become more vulnerable to climate change effects and for significant infrastructure projects.

In 2022/23, we will build on this work by carrying out a performance audit of the readiness of the local government sector to respond to climate change. We will evaluate how a cross-section of councils are preparing for and setting priorities for their climate response, including steps they are taking to respond to climate change effects, reduce greenhouse gas emissions, and transition to a low-carbon economy. We will also evaluate how councils assess and report on progress towards the climate actions they have committed to, and the resourcing and governance arrangements they have in place.

This work will provide us with a baseline from which to assess future progress, and our audit should help councils that are yet to determine their climate actions.

We will continue to consider how public organisations are reporting on their response to climate change, and our role in providing assurance over climate-related reporting, decision-making, and planning processes through our annual audits of public organisations.

3. Integrity in the public sector

Maintaining public trust and confidence in the public sector is essential for public organisations to operate effectively, achieve the impacts they are seeking, and be able to meet their stated outcomes. Trust is built over time and is maintained by demonstrating competence, reliability, and honesty. When questions are raised about any one of these, trust and confidence can erode. It is important that public organisations and their staff are seen to be meeting high standards of integrity.

In 2022/23, we will continue our work to support public sector integrity. We expect that our work will continue to involve collaboration with other organisations where appropriate – for example, Te Kawa Mataaho, the Office of the Ombudsman, Transparency International New Zealand, and the Serious Fraud Office. We will also engage with a wide range of public organisations to encourage further discussion and promote good practice.

Planned work: Promoting and supporting the integrity framework and guidance
Before the end of 2021/22, we will publish an integrity framework and guidance based on best practice and wide consultation across the public sector. In 2022/23, we will focus on encouraging public organisations to assess their organisation relative to the integrity framework. We will identify additional integrity resources to support the use of the framework, including considering the findings from the research we commissioned in 2021/22 on Māori perspectives on public accountability.

In 2022/23, we will also work to translate the integrity framework and guidance into a performance audit methodology we can use to better assess the integrity culture in public organisations.
Planned work: Looking at integrity in central government procurement
In 2022/23, we will continue our multi-year performance audit work programme on integrity. We plan to examine how government agencies support integrity practices when they procure goods and services in emergency situations, and how they provide transparency to the public. We are also interested in the roles senior staff play in upholding integrity standards when procuring during an emergency.
Planned work: Monitoring progress: Operation Respect (New Zealand Defence Force)
Operation Respect, a programme aimed at eliminating inappropriate and harmful behaviours and sexual violence in the New Zealand Defence Force, was first launched in 2016. In 2020, an independent review by the Ministry of Defence into the programme recommended that the New Zealand Defence Force request the Auditor-General to carry out an audit of the New Zealand Defence Force's progress on Operation Respect every two years for 20 years.

Stage One (2021-2026) of our audit programme will focus on how effectively the New Zealand Defence Force has designed and re-set Operation Respect, through to when we expect to see some progress in improved outcomes. The first performance audit is focusing on how well Operation Respect has been designed and set up to achieve the aims of the programme. We expect to complete this work in 2022/23.

4. Reporting on well-being

The Public Finance Act 1989 was amended in 2020 to improve the reporting of well-being objectives and the state of well-being in New Zealand.

The Government is now required to set, and report on, well-being objectives annually. The Treasury is required to report on the state of well-being at least once every four years.

We understand that the Treasury will publish the first Wellbeing Report in November 2022. We intend to provide commentary on the report, including looking at how well the Treasury has met the objectives and requirements of the report under the Public Finance Act 1989.

Planned work: Commentary on the Wellbeing Report
Using indicators, the Treasury's Wellbeing Report must describe the state of well-being in New Zealand, how it has changed over time, its sustainability, and any risks it faces. We understand the first Wellbeing Report will be published in November 2022.

The Wellbeing Report is one of a suite of stewardship reports the Treasury is responsible for. We will look at how well it describes the state and sustainability of well-being in New Zealand. We will also look at the report's position and place in the suite of stewardship reporting and its potential use in supporting the quality and depth of public information and the Government's long-term well-being objectives.

6: The National Cyber Security Centre is part of the Government Communications Security Bureau. Its role is to help New Zealand's most significant public and private sector organisations protect their information systems from advanced cyber threats.