Performance audits

Our mandate allows us to audit the performance of all public organisations, including government departments, councils, schools, hospitals, and the defence force.

Our proposed programme of performance audits is published each year in our Annual Plan.

The product of a performance audit is a report to Parliament that will identify good practices, raise any issues or concerns, and (where necessary) recommend improvements to the public organisation's performance.

We complete about 15 performance audits each year.

What is a performance audit?

Performance audits are carried out under section 16 of the Public Audit Act 2001. A performance audit can examine:

  • how effectively and efficiently a public organisation is working;
  • whether a public organisation is complying with its statutory obligations;
  • any act or omission that might waste public resources; and
  • any act or omission that might show (or appear to show) a lack of probity or financial prudence by a public organisation or one or more of its members, office holders, and employees.

We report good performance and bad

We aim to provide Parliament and the public with assurance that public organisations are delivering what they have been asked to and have operated lawfully and honestly. We report both good performance and bad.

Benefits for the public organisations that we audit include:

  • independent assurance of their operations; and
  • guidance to improve their efficiency and effectiveness.

We do not comment on policy

The Auditor-General does not have any authority to question matters of Government or council policy. Making policy decisions is a job for elected representatives.

For example, we would not comment on the policy direction taken by the Government or a council, but we could examine whether a policy was being implemented appropriately.

How we audit performance

Performance audits are usually carried out by two members of the Sector Performance Group. Performance audit staff have a mix of skills and experience in many diverse fields.

A performance audit takes about 12 months to complete, depending on its scope and complexity.

To carry out performance audits in a professional and fair manner, we follow a set process:

  • Scoping - the broad audit topic is identified through an office-wide audit planning process. Before we start the audit, we contact public organisations being audited and other interested parties to seek input into the audit's scope and timing. Some performance audits will involve more than one public organisation.
  • Planning - we create a set of audit criteria or expectations, against which we assess performance. We consult public organisations being audited on the audit criteria used and may take expert advice.
  • Fieldwork - we collect evidence to ascertain whether our audit criteria or expectations have been met. Methodologies used include interviewing staff and stakeholders, reviewing documents and files, observation and statistical analysis. Under the Public Audit Act 2001 we can access any information we consider necessary to carry out our work. The information we collect is confidential and cannot be requested under the Official Information Act 1982.
  • Summary of findings - we analyse the evidence we have collected and draw our conclusions. We provide public organisations being audited with a summary of our findings - this can be an oral briefing, a written document, or both. The public organisation has a chance to comment on our audit findings.
  • Draft report - once a performance audit report is drafted, its content is checked for factual accuracy, peer reviewed, and edited. Public organisations being audited are given two weeks to comment on the accuracy, balance, and presentation of the draft report. Because the Auditor-General in independent, we are not required to reach agreement on a report's content.
  • Public release of the report - the report is presented to Parliament and becomes public. We offer relevant Ministers, select committees, and other interested parties briefings on the report.

Page last updated: 15 April 2021