Enhancing public reporting on Covid-19 related funding and expenditure

4 May 2022

The Secretary to the Treasury
1 The Terrace
PO Box 3724
Wellington 6140

Tēnā koe Caralee

Enhancing public reporting on Covid-19 related funding and expenditure

Thank you for the Treasury’s continuing engagement with my Office on the Treasury’s data releases concerning the Covid-19 Response and Recovery Fund (CRRF).

As you know, I would like to see further improvements in accountability for public expenditure. In my recent report to Parliament, Observations from our central government audits: 2020/21, I set out where I believe further improvements can be made at a whole-of-government level, on key initiatives, on cross-government activities, and at the agency level. In my view, the ability of Parliament and the public to see clearly where their taxes are spent and what has been achieved with this public expenditure would strengthen trust and confidence in the public finance management system.

I have, therefore, been concerned about the accountability for spending in response to the Covid-19 pandemic. In my view, the legislative financial reporting requirements (which the Government and its agencies have complied with) are not enough to provide Parliament and the public with sufficient information about CRRF expenditure. My position is that greater transparency is warranted because of the scale of the funding set aside (now $74.1 billion), the extraordinary circumstances in which funding decisions are being made, and the potential implications for the Crown’s financial position (and public debt) for years to come.

Given the public interest in Covid-19 related expenditure, and the extensive work the Treasury has done to include more data and information on its website, I thought it useful to formally record my views about the information now publicly available. My views are based on the several information and data releases provided on the Treasury’s website throughout 2021 and the latest update and data release on 11 February 2022.

The data, now published on the Treasury’s website, addresses many of my concerns about the transparency and accessibility of Covid-19 related financial information. Thank you for the work you have done in this area.

I also accept that there are practical limitations to what further information the Treasury can currently report, and I acknowledge that the statutory responsibility for reporting on expenditure incurred and performance achieved rests with individual agencies and their respective Ministers.

In particular, I note that Parliament and the public can now access information about the CRRF, including:

how much funding has been set aside for the CRRF;
how much of the CRRF funding has been allocated;
the specific initiatives to which the funding has been allocated;
the specific Votes and appropriations to which the funding has been allocated;
how much CRRF expenditure Parliament has authorised in any one year under appropriations that relate solely to the Covid-19 response; and
how much CRRF expenditure has been incurred against each of the Covid-19 specific appropriations.

A continuing challenge will be to ensure that the publicly available information is kept up to date. I note that the expenditure-incurred figures include spending up to 30 June 2021. Although I recognise that reliable information is critical, providing this information more regularly would help ensure that the public reporting remains relevant. I understand that the Treasury intends to update the expenditure record shortly.

One ongoing concern is that it is not possible for Parliament and the public to know what was spent on some specific Covid-19 related initiatives because the information for Covid-19 funding (by initiative) is organised differently from the statutory reporting on expenditure incurred (by appropriation). For example:

The Covid-19 initiative Funding for Family Violence COVID-19 Response: Services for Children and Youth Experiencing Violence is allocated across two Votes: Vote Oranga Tamariki and Vote Police.
The Covid-19 initiative Increasing Wellbeing And Mental Health Support To Learners And Education Workforce is similarly allocated across two Votes and, within Vote Education, funding is allocated across four different appropriation categories, all of which also include funding for other initiatives.

I understand that the public finance management system does not currently record information on the amount of expenditure incurred under each initiative. I believe there is considerable public interest in this information, and additional reporting on some of the major initiatives would be helpful. In this regard, I also note recent comments by the Minister of Finance in the House in support of providing more of this type of information, recognising cost-benefit considerations and the system limitations that currently exist.

In the absence of special reporting on CRRF initiatives, there should be sufficient disclosure to enable interested parties to track funding decisions on initiatives through to the actual expenditure incurred under Covid-specific appropriations. To this end, the Treasury’s cross-referencing of each of the Covid-19 related initiatives to the specific appropriations under which the expenditure is to be authorised is very helpful. I acknowledge the Treasury’s efforts in providing it.

Parliament and the public should be better able to understand the services delivered and the outcomes achieved with public money. I would like to see reporting on what has been achieved with funding from the CRRF (and, indeed, from all other large government initiatives). Although I am aware that some evaluations are being planned, my auditors will continue to examine government agencies’ annual reports for information on what has been achieved and the overall cost effectiveness of major CRRF initiatives. I also acknowledge that the Treasury has referenced in its guidance to government agencies the Audit New Zealand bulletins on the implications of Covid-19 for annual reports.

I recognise the work that the Treasury has done to improve transparency for Parliament and the public on the use of the CRRF in response to Covid-19. As this is a matter of high public interest, I intend to publish this letter on our website.

Nāku noa, nā

John Ryan
Controller and Auditor-General