Annual report 2022/23

Impact 3: The public sector improves its performance and accountability

We look at a range of activities to assess whether we are having a positive influence on the performance and accountability of the public sector.

We assess whether public organisations have improved aspects of their performance in response to our performance audits and inquiries. We assess whether public organisations have implemented our annual audit recommendations. We also determine whether government departments are spending money only within the authority provided by Parliament (appropriations).

Controller function

The 2022/23 result shows how many times unappropriated expenditure occurred in 2021/22, based on information from the Government’s 2021/22 financial statements.

In 2021/22, there were 12 instances of unappropriated expenditure reported. This is the same number as for 2020/21, which was the lowest number of unappropriated expenditure incidents this century. We measure this through the number of instances of expenditure incurred in excess of, or without, appropriation or other authority from Parliament. In the table below, the results in the score column are from the financial statements of the Government, which are prepared for the previous financial year.

As reported in the 2021/22 Financial Statements of the Government, the Ministry of Social Development had been making accommodation assistance payments outside the legal criteria and outside the scope of the relevant appropriation.

In October 2022, we wrote to the Ministry expressing our concerns and requesting urgent remedial action, including that the Ministry stop making unlawful payments as soon as possible. In late November 2022, Parliament enacted urgent legislative change to align the law with the Ministry’s practice.

Also in response to our concerns, the Ministry commissioned an independent review of its arrangements for ensuring that its practice is aligned with the law, including its efforts to resolve issues once identified and to minimise future occurrences. At the same time, it put a concerted effort into investigating whether there could be similar alignment issues and addressing them promptly.

Indicator: Government departments reduce the instances of public spending without parliamentary authority
Target: Reducing

OAG reporting year Government financial year Score
2022/23 2021/22 Maintaining – 12
2021/22 2020/21 Reducing – 12
2020/21 2019/20 Increasing – 30
2019/20 2018/19 Reducing – 19
2018/19 2017/18 Increasing – 26

The results are based on the Treasury’s data for preparing the Government’s financial statements, which are audited by the Auditor-General.

The bar graph shows that the number of instances of unappropriated expenditure fluctuated between 12 and 30 from 2015/16 to 2021/22, with a significant decrease in 2020/21 and 2021/22. The total unappropriated spending during 2021/22 ($162 million) equates to 0.09% of the expenditure authorised in the final (updated) Budget.

Number of instances of unappropriated expenditure, from 2015/16 to 2021/22

Number of instances of unappropriated expenditure, from 2015/16 to 2021/22

Annual audits

To help the public sector improve, at the end of each audit the governors of public organisations receive a report setting out audit findings and recommendations.

Part of our annual audit includes identifying and reporting on how large public organisations have responded to those recommendations. We measure the impact of our work by assessing large public organisations’ implementation of our recommendations.

Indicator: Public entities implement our annual audit recommendations in a timely manner
Target: Increasing (or at least maintained)

Year Score
2022/23 36%
2021/22 43%
2020/21 38%
2019/20 46%
2018/19 New indicator for 2019/20

Note: The number of large public organisations can vary. For 2022/23, 116 were considered large organisations (they included district health boards, tertiary education institutions, government departments, and councils). The number for 2021/22 was 128, and 195 in 2020/21. In 2019/20, we only included tertiary education institutions.

Implementing recommendations helps public organisations to manage risks and realise additional benefits of the audit. In 2022/23, we assessed how 116 (2021/22: 128) large public organisations implemented the recommendations from our audits.

Of the 1239 recommendations we made at the beginning of 2022/23, 443 (36%) were implemented by the end of the financial year. Of the 1565 recommendations we made at the beginning of 2021/22, 676 (43%) were implemented. A number of factors affect whether a public organisation implements our recommendations. Timeliness of delivering management reports, including recommendations, the scale of change recommended, and the capacity and willingness of the organisation to make the change all affect the implementation speed. As we improve on our timeliness of reporting, we expect the uptake of recommendations to also improve.

Performance audits

We carry out performance audits to help public organisations improve their effectiveness and efficiency.

We continue to look for ways to increase the impact of our performance audits. We provide more detail in Service 5: Assess public sector performance and accountability.

Indicator: Public organisations have improved aspects of their performance in response to our performance audits
Target: Report on one to two follow-ups a year

Year Score
2022/23 Achieved
2021/22 Achieved
2020/21 Achieved
2019/20* Results not available
2018/19 Achieved

* We published the results from our follow-up work on our website in 2020/21.

Following up on the implementation of our recommendations

Between 12 and 24 months after a performance audit report is published, we write to the audited organisation to ask for a self-assessment against its progress on each of the recommendations in the report. The public organisation’s self-assessment informs decisions about whether we will carry out any further follow-up work and the extent of the work we might do. The approach means we can follow up on more audits than we could previously.

In 2022/23, we followed up on how public organisations had responded to four performance audits, about infrastructure as a service, managing freshwater quality, strategic suppliers, and marine protection planning processes. We published the responses from the audited organisations on our website.


We inquire into issues of concern that are raised with us or that we identify through our intelligence gathering and other work. Our inquiries seek to understand what has happened and what lessons there are for the public sector. Our findings help public organisations improve their performance and accountability. We provide more details of the inquiries process in Service 4: Carry out inquiries into matters of public interest.

Indicator: Public organisations have improved aspects of their performance in response to our inquiries
Target: Report on one to two each year

Year Score
2022/23 Achieved
2021/22 Achieved
2020/21 Achieved
2019/20 Achieved
2018/19 Achieved

We identify and report on any effects from our inquiries. In 2022/23, we identified “effects” as the public organisation taking action in response to the findings of our inquiry.

In response to our inquiry into Horowhenua District Council using consultants to provide services in relation to the Levin landfill, the Council implemented its new Procurement Policy, established a Procurement Review Group, developed internal staff training programmes (refresher and staff induction) supported by the creation of a staff Procurement Portal, began reporting on major vendor payments, and carried out several other projects to improve its procurement practices.

In December 2022, the Social Services and Community Committee reported on our inquiry report into the Ministry of Social Development’s funding of private rental properties for emergency housing. The Committee agreed with our findings that the Ministry of Social Development should have improved its processes for providing emergency accommodation and assessing properties for their suitability, its compliance with the Residential Tenancies Act 1986, and its value for money. The Committee also agreed that the lack of planning and oversight to ensure value for money and acceptable service to clients was unacceptable, and that lessons need to be learned to ensure that this experience was not repeated.

In August 2023, the Government announced new voluntary standards for emergency housing providers. From 2 November 2023, the Ministry of Social Development will give preference to working with emergency housing providers who opt in to the new voluntary supplier standards. These standards set expectations that services provided are of a reasonable standard, safe, suited to client needs, have adequately maintained facilities, and have a dispute resolution process in place.