Outcome 3: An accountable public sector

For Parliament and New Zealanders to have trust and confidence in the public sector, public organisations need to be effectively held to account for their spending and performance.

Each year, we assess trends for aspects of public sector accountability. These aspects include timely and reliable information, sound management, and good governance.

Indicator: Number and percentage of unmodified audit opinions from our annual audits
Target: Improving trend (or at least maintained) for the percentage

The percentage of unmodified audit opinions from our annual audits decreased by 1%. This does not necessarily mean that public organisations’ reported financial and performance information has dropped in quality. Instead, it is because there are fewer total audit opinions, and many small outstanding audits still to be completed have historically had fewer audit report modifications.

Indicator: Percentage of audit reports that are signed off by the applicable statutory deadline
Target: At least 80%

* Revised measure for 2020/21

This target has not been achieved since the onset of Covid-19 in March 2020.

In 2021/22, 57% of audit reports were signed by the applicable statutory deadlines. We have focused on completing the audits of large public organisations that are most critical for public accountability and parliamentary scrutiny. We are pleased to have completed 88% of the audits of large public organisations on time.

However, for many small organisations, we completed 54% of audits on time. This is due to the impacts of the Covid-19 pandemic on staff availability for both the public organisations and audit service providers. These disruptions affected the timely completion of audits, particularly for schools.

Indicator: Percentage of entities with audit reports in arrears as at 30 June
Target: Less than 10%

*Revised measure for 2020/21.

This target has not been achieved since the onset of Covid-19 in March 2020.

As at 30 June 2022, 33% of audit reports were in arrears because of the Covid-19 pandemic impacting staff availability in both public organisations and audit service providers. More than 70% of the audit reports we must issue each year are for schools, and they are required to have audited financial statements completed by 31 May.

As noted above, we completed 54% of audits for small organisations, including schools, on time. Many of those not completed remained incomplete as at 30 June 2022. Schools accounted for 98% of the audits in arrears.

Supplementary indicators

We draw on other information sources to assess public sector accountability. These indicators provide only supplementary information.

Indicator: Worldwide governance ranking (Worldwide Governance Indicators)
Target: At or above 90th percentile, with improving trend (or at least maintained)

Source: World Bank.

The World Bank's Worldwide Governance Indicators measure the quality of governance in more than 200 countries for six dimensions of governance:

• Voice and Accountability.
• Political Stability and Absence of Violence.
• Government Effectiveness.
• Regulatory Quality.
• Rule of Law.
• Control of Corruption.

The 2021 results are not yet available. From 2017 to 2020, New Zealand has consistently ranked above the 90th percentile for all six governance dimensions.

Indicator: Integrity ranking (International Civil Service Effectiveness Index)
Target: Ranking is improving (or at least maintained)

Source: University of Oxford.

The International Civil Service Effectiveness Index (the Index) assesses how a country's central government civil service is performing compared with other countries. The integrity aspect of the Index measures the extent that civil servants behave with integrity, make decisions impartially and fairly, and strive to serve both citizens and Ministers. Because the Index has not carried out an assessment since 2019, we will reassess this indicator when we review all our performance indicators in the coming year.