Summary of agencies’ responses

Summary of agencies’ responses to recommendations in our report Improving value through better Crown entity monitoring.


Crown entities are responsible for providing a wide range of public services, including education, health care, accident and earthquake insurance, public broadcasting, and constructing and maintaining national infrastructure (such as roads).

In 2022, Crown entities collectively accounted for more than a third of total government expenditure, held 54% of fixed assets on the Crown’s balance sheet, and employed 70% of central Government employees.1

In 2022, our report Improving value through better Crown entity monitoring looked at whether monitoring arrangements for Crown entities were effective.2 We looked at nine different monitoring arrangements between Crown entities and their monitoring departments (there were nine Crown entities and five monitoring departments).

We found good guidance available and a strong community of practice. Monitoring departments facilitated key processes well in serving Ministers and Crown entities. However, it was unclear how well monitoring helped to build an understanding of Crown entity performance. There was also a risk that monitoring had become a compliance exercise generating little value. We saw that organisations were willing to improve to get more value from their monitoring.

Given the importance of this work, in March 2024, we wrote to the monitoring departments and Crown entities that were involved in our 2022 audit. We asked for a self-assessment of progress they had made to address the recommendations in our audit report and in improving their Crown entity monitoring arrangements more generally.  This document summarises what we learned from those agencies’ responses. 

We also wrote to Te Kawa Mataaho Public Service Commission, given its role in providing guidance and support for the Crown entity monitoring system, and have published its response on our website.

This summary draws on the self-assessments that agencies provided us. We have not audited the information in this update.

The Public Service Commission’s response

The Public Service Commission highlighted the importance of high trust and high-quality relationships, centred on driving results and performance, as being a significant focus of its leadership across the Crown entity monitoring system. Since our performance audit, it has continued to develop support for Crown entities and monitoring departments. Initiatives aimed at improving the quality of Crown entity monitoring that it has instigated or which it has been closely involved with include:

  • Releasing updated good practice guidance for Crown entity monitoring (in May 2023) that was informed by engagement through communities of practice, including the Monitoring, Appointments and Governance Network, the Crown Entity Chairs’ Reference Group, and a group of senior governance and monitoring managers.3
  • Establishing a postgraduate course for Crown entity monitors in association with Victoria University of Wellington and the Monitoring, Appointments and Governance Network.
  • Leading the development of a competency framework for Boards of Crown entities, supported by Crown entity board members and monitoring departments.

The Public Service Commission told us that its work has increased the visibility of, and focus on, the importance of good governance, integrity and conduct, and robust monitoring arrangements.

The progress monitoring departments and Crown entities reported

The responses of monitoring departments and Crown entities show mixed progress. Some monitoring departments had invested in proactive working relationships with their Crown entities, and this had formed the basis for improved communication and collaboration. They reported good progress in addressing our recommendations, including the development of agreed monitoring frameworks that reflect the context and circumstances of Crown entities, and a more collaborative approach to developing accountability documents. However, responses from some other agencies indicated limited progress in implementing the recommendations from our 2022 report.

The main themes from the self-assessments are summarised below.

Responses reinforced the importance of effective relationships

Our 2022 report highlighted the importance of effective relationships between Crown entities, monitoring departments, and responsible Ministers. For example, our report described how strong relationships can facilitate better information sharing, lead to more effective and enduring solutions, and can improve the quality of advice to responsible Ministers. 

The progress reported by monitoring departments and Crown entities reinforced the importance of our 2022 findings. Several monitoring departments and Crown entities told us they had worked to improve collaboration, engagement, and consultation since our 2022 audit. The importance of a strong relationship “characterised by openness, high trust and mutual respect” was acknowledged as the foundation for improved collaboration.

One Crown entity reported that the quality of its relationship with its monitoring department had improved from one that could be characterised as “paternal” to one of “peers”, where both parties understood and acknowledged the role and contribution of the other.

Some progress has been made in improving monitoring frameworks

Two monitoring departments and three Crown entities reported progress in formalising monitoring frameworks. They noted that collaboration between parties had been important and enabled:

  • monitoring frameworks and agreements to accurately reflect a shared understanding of each other’s roles and responsibilities;
  • expectations to be customised to each Crown entity’s context and circumstances; and
  • the establishment of regular review periods and opportunities to modify monitoring frameworks as circumstances permit.

However, not all reported progress in improving their monitoring frameworks. One Crown entity reported that its monitoring department had not prepared a monitoring plan for 2023/24, and that it had not yet been consulted on a potential monitoring plan for 2024/25.

Two other Crown entities reported they had no documented monitoring framework in place, and one reported that there had been no engagement with its monitoring department on the development of an appropriate monitoring framework at all.

Some monitoring departments and Crown entities reported improved engagement in the development of accountability documents

We heard from six monitoring departments and Crown entities about improved engagement in the development of accountability documents. They reported:

  • Good engagement between all relevant parties – Ministers, Crown entity boards, chief executives, and management teams. The engagement had clarified roles and expectations of each other.
  • Regular engagement – three monitoring departments were having quarterly meetings with their Crown entities. Engagement occurred as part of the planning process, to ensure that agreed timeframes, budget targets, and Ministers’ expectations were clear and could be met.
  • Engagement about specific matters, such as the development of performance measures, better understanding of the operating context of Crown entities, and the identification and response to specific risks.
  • Improved quality of feedback – from Crown entities to Ministers about accountability documents, to stakeholders during annual reviews, during select committee annual reviews, or to appointed auditors.

In these cases, we heard that improved engagement helped ensure that accountability documents were proportionate, there was good discussion on performance measures, and that documents demonstrated a stronger alignment to Government priorities.

However, two Crown entities reported having little or minimal engagement with their monitoring department in the development of accountability documents. Those Crown entities cited a lack of capacity in the monitoring department as a key factor, and this led to delays in completing accountability documents, feedback being rushed, and uncertainty about how well the responsible Minister was engaging with information provided by Crown entities.

Maintaining capability and capacity in monitoring teams is still a challenge

Responses showed that maintaining enough capability and capacity in monitoring teams remains a challenge.

For example, Crown entities that mentioned infrequent meetings and a lack of appropriate representation at meetings attributed this lack of engagement to high turnover in monitoring teams.

One Crown entity reported “considerable amount of time back-briefing people” in the monitoring department so that the monitoring department could carry out monitoring effectively. The Crown entity reported an overall lack of understanding by its monitoring department of the context within which the Crown entity operates.

Another monitoring department told us that it is considering merging its monitoring function with its policy function. It told us that an integrated team would enable a system-wide approach that works in a more “strategic, analytical and relational way”, including in the development of performance reporting and other advice it provides to Ministers.

Concluding comments

We are encouraged by the progress that many of the monitoring departments and Crown entities have made. However, the responses we received from monitoring departments and Crown entities underscored the importance of strategic relationships that are not limited to the monitoring team but include a Crown entity’s chief executive, its board, and the responsible Minister. All need to be clear about their respective roles.

The Public Service Commission’s survey (carried out in July 2023) that reported around 96% of monitoring practitioners were highly satisfied or satisfied with the Public Service Commission’s support for Crown entity governance and monitoring. This is positive.

However, ongoing focus is needed across monitoring departments to ensure implementation of tailored and robust monitoring frameworks that add value to Ministers, Crown entity boards, and monitoring departments. The Public Service Commission has also been working with other central agencies to broker relationships and improve information flows to support Crown entity boards and responsible Ministers. In our view, it could also consider establishing a framework for assessing the maturity of monitoring arrangements.

1: Guidance for Statutory Crown Entities - Resource for Preparation of Governance Manuals - Te Kawa Mataaho Public Service Commission.

2: This audit built on an earlier piece of work, How government departments monitor Crown entities, that looked at how well monitoring departments supported their Ministers.

3: See Te Tūāpapa o te Mahi Tika: He Aratohu hei Aroturuki i te Hinonga Karauna, The Foundations of Good Practice: Guidelines for Crown Entity Monitoring.